Economic union without social union: The strange case of the European social dialogue

Abstract

The recent centralization of European economic governance raises the question of parallel developments in European social policy. On the basis of an examination of the case of the European social dialogue, the propensity of ‘spill-over’ theories to explain developments in the social sphere is considered. The following three potential future trajectories for the dialogue are reviewed: the possibility of the dialogue (1) becoming broader and more redistributive, (2) becoming a means of European Union (EU)-level wage control or (3) remaining in its current form. It is concluded that the status quo is likely to endure and that such a development threatens the integrity of spill-over theories and raises the issue of the dialogue’s utility to European trade unions.

Keywords

European economic governance European social dialogue European social partners soft law spill-over

A centralizing European Union (EU) economic regime

The EU is centralizing economically. In response to the sovereign debt crisis that has posed an existential threat, numerous measures have been taken to centralize EU economic governance and guarantee the Euro’s stability. Supervision of national economic and social policy, traditionally remarkable for its ‘soft’ character, has become more stringent after the 2011 ‘six pack’ regulations and introduction of the European semester. Custody of financial institutions, hitherto within the domain of member states, has become the prerogative of the European public authorities following reforms to the European banking system. Many think that debt mutualisation will come about in the longer term. In line with the predictions of certain integration theorists and in contrast to divergent socio-economic outcomes in member states affected disproportionately by the crisis, the EU is undergoing a process of economic centralization.

Such events pose intriguing questions about developments in the social sphere. Several theories of European integration, certain of which foresaw European economic governance’s recent centralization (Niemann and Ioannou, 2015), after all expect the EU’s social policy competences to mirror developments in the economic sphere. Such a development would be consistent with spill-over theories of European integration. These theories, espoused classically by neofunctionalists (Haas, 1958), expect the integration process to prompt national actors to shift resources and loyalties to the European level via functional, political, geographical, cultivated and cultural forms of spill-over that in turn impel further integration. The extent of this spill-over, recent scholarship on regional integration agreements (RIAs) suggests (Kaminska and Visser, 2011: 258), is mediated by levels of policy integration and the institutional settings for decision-making and dispute-solving available to social partners.

Approaches to integration such as multi-level governance theory also foresee integration in one policy sector prompting further subsequent integration. In studies of the relationship between discrete governance levels in the EU, multi-level governance theorists have postulated an EU in which symbiotic policy relationships exist between diffuse actors (Marks et al., 1996). Polanyian interpretations of the EU stipulate a similar hypothesis. The well-known ‘double-movement’, in which social forces react against enhanced market integration, has been used to anticipate the deepening of European social policy (Caporaso and Tarrow, 2009). Such predictions additionally converge with a tenet of industrial relations theory long advanced by scholars, namely that industrial relations structures tend to follow the market (Commons, 1909). A famed exponent of this hypothesis, the American scholar John Dunlop, indeed predicted at the time of the European Economic Community’s (EEC) creation that it would give rise to an integrated European industrial relations system (Dunlop, 1958: 75).

The capacity of European social policy to act as theory predicts has been the subject of sustained debate. Following spill-over theorists, certain scholars have characterized European social policy as reflecting the logic of spill-over. Some have proposed that the participation of organized interests in European social policy is a result of functional, political and geographical spill-over (Falkner, 1998: 196–7), while others have seen spill-over in European education and training policy (Warleigh-Lack and Drachenberg, 2011) and contended that European Court of Justice (ECJ) social policy decisions follow a Polanyian logic (Caporaso and Tarrow, 2009). Others have discerned the hand of spill-over in the Europeanization of industrial relations. In work considering eclectic trends in European labour markets, scholars sympathetic to neo-functionalism (Kaminska and Visser, 2011) and multi-level governance theory (Marginson and Sisson, 2004) have proposed that trends towards the Europeanization of industrial relations in fields as diverse as working time, wage bargaining and employee representation are the results of processes put in motion by European integration. Some have reacted sceptically. Scholars sympathetic to inter-governmentalist views of European integration have asserted that member states remain primary custodians of social policy, while others have pointed to the limited extent of social policy spill-over (Talani, 2014: 191) and underlined continued national control of competences such as pensions and unemployment benefits. Such authorities have indeed contended that social policy is more likely to remain under national prerogative than economic aspects of integration, the argument being that the ‘positive’ institution building necessary for social policy integration is more onerous than the ‘negative’ integration requisite for economic integration (Scharpf, 2010). Researchers sceptical about the extent of the ‘Europeanization’ of industrial relations have argued along similar lines (Streeck, 1995).

European social policy’s tendency to react to deepened market integration has thus been the subject of several accounts, yet the recent centralization of European economic governance makes re-evaluation of this tendency most timely. This is an endeavour we undertake in this article. Specifically, we consider the propensity of the European social dialogue, a branch of European social policy that involves negotiations between EU-level employers and trade unions, to follow developments in the economic sphere. After this introduction, the historic proclivity of the dialogue to mirror developments in the economic sphere is assessed. Certain of the dialogue’s achievements are commensurate with the spill-over hypothesis, yet chronic political and structural problems have plagued the dialogue and in the last decade, it has conspicuously ‘softened’. Future scenarios in the light of a centralizing EU economic polity are then considered, specifically the prospects of the dialogue becoming broader and more redistributive, becoming a means of EU-level wage control and remaining in its current shape. It is decided that although limited redistributive initiatives and sporadic attempts at wage-control may be attempted, the social dialogue is likely to remain largely in its present form. Appraisal of the European social dialogue’s implications for theories of European social policy predicated on spill-over is made in conclusion. It is argued that although certain of the dialogue’s achievements are elucidated by spill-over theory, the hypothesis largely fails to explain the case of the dialogue. The consequent utility of the dialogue to European trade unions and wider implications for European social policy are finally reflected upon.

Social dialogue at the European level: a cup half full or empty?

Social dialogue at the European level has a long history. From the European project’s start, social dialogue ‘joint committees’ existed in those sectors in which political and economic integration was most substantial, and, as integration deepened in the 1970s, tripartite European summits began to be held. Momentum towards deeper European social dialogue began to gather in the 1980s. In 1985, acting on fears that a single market without shared social standards would instigate social dumping, Commission President Jacques Delors gathered the European social partners to Val Duchesse castle in Brussels and initiated dialogue between the parties. Though the ‘Val Duchesse’ dialogue represented something of a landmark, it was compromised by its lack of basis in the European treaty and its output’s non-legally binding character. Demands accordingly gathered for a European social dialogue that better resembled the institutionalized and redistributive social dialogue systems still common in member states (Crouch, 1993). Such petitions were congruent with wider changes sweeping European governance at the start of the 1990s and the European social dialogue became formally institutionalized in the Social Protocol that was annexed to the Maastricht Treaty in 1991.

The Protocol laid down, via article 138, the right of the European social partners to be consulted by the European public authorities on the direction of social policy proposals, and, via article 139, provided the social partners with the ability to conclude EU-level collective agreements that could be implemented either through a non-legally binding implementation route availing of the ‘procedures and practices specific to management and labour and the member states’ or legally binding Council Directive.¹ Such rights complemented other procedures for social partner consultation; social partners had long been represented on the European economic and social committee (EESC) and would later participate in the European macroeconomic dialogue. The latter forum, established in 1999 and involving a biannual exchange of views between the Council, Commission, social partners and European Central Bank (ECB), aimed to integrate social dialogue into the workings of Economic and Monetary Union (EMU). Its profile, at least in its first 15 years of existence, nonetheless remained somewhat minor.

Many discerned a social rejoinder to deepening European market integration in the rights granted to the social partners. Pointing to the dialogue’s existence and the subsequent European cross-industry Agreements on Parental Leave (1995), Part-time Work (1997) and Fixed-term Work (1999), Falkner (1998) heralded the coming of a ‘corporatist social policy community’ and asserted such achievements to be the result of deepening government and social partner engagement with the European polity congruent with the spill-over hypothesis. The Maastricht Treaty, Falkner proposed, had represented the ‘Waterloo’ of inter-governmentalist approaches to European integration. Incremental progressions in the dialogue’s competences were anticipated by others (Jensen et al., 1999). Some hoped that the European social partners could find ways of preventing wage dumping (Kim, 1999: 418), while figures in the European Trade Union Confederation (ETUC) considered European sectoral wage determination a possibility in the years following EMU (Coldrick, 1998: 24). Such predictions were not necessarily congruent with developments in national regimes. Post-war corporatist social dialogue systems had long been under pressure and, from the 1990s, peak-level national social partner agreements increasingly aimed at wage restraint so as to comply with criteria for EMU (Rhodes, 2001).

Other responses to the European social dialogue’s new competences were unenthusiastic. The dialogue indeed attracted a series of detractors in its first decade, this school making three key criticisms. The first (1) related to the organization of the European social partners. Aside from the limited resources which national social partners continued to dedicate to the European level, the difficulty of European social partners with highly diverse national affiliates resolving the collective action problem was commented upon (Keller, 2003a; Keller and Sörries, 1999). Critics also drew attention to the patchwork profile of systems of social dialogue in member states. The existence of member states with low union density rates and disorganized social dialogue structures, sceptics asserted, was likely to make implementation via the non-legally binding route highly problematic (Keller, 2003b: 415–7).

The (2) limited legal competences with which the dialogue was endowed were additionally remarked upon. Though the Social Protocol had made the conclusion of European agreements for the first time possible, critics noted that crucial substantive issues such as pay and social security remained outside of the dialogue’s competences and thus excluded from negotiations (Streeck, 1994). Key procedural industrial relations rights, such as those to association, strikes and lock-outs, were also specifically omitted from the dialogue’s legal ambit. A third criticism was (3) the dialogue’s dependence on the European Commission. As a consequence of the unwillingness of European employers to enter into meaningful dialogue and the limited mobilization capacity of European trade unions, it was noticed that employer readiness to negotiate was heavily contingent on the threat of legislation (Streeck, 1994). European Commission support alas had limits and as the 1990s progressed, the volume of legislative proposals emanating from the institution ebbed.

Such critiques appeared increasingly prescient. Notwithstanding the three cross-industry agreements produced in the 1990s, the dialogue showed little sign of the maturation foreseen by proponents of spill-over theory. Agreements continued to be concluded infrequently, there was little indication of deepening national social partner commitment to the dialogue and pay negotiations appeared a distant prospect. Nor did the 1998 launch of European sectoral social dialogue committees (SSDCs) do much to invigorate the dialogue. Though the committees became established in a number of sectors and would take on increasing importance, such institutions were marked by similar frailties to those exhibited by the cross-industry dialogue (Keller, 2003a). Agreements subsequently implemented by Council Directive were concluded in a minority of sectors characterized by integrated markets and Europeanized sectoral policies (Leisink, 2002); yet, in the majority of sectors such outcomes were absent. Predictions of spill-over thus appeared to have questionable foundation by the millennium’s turn. The dialogue could point to certain achievements, yet it had largely failed to develop as optimists had hoped. When cross-industry European social partner negotiations on the crucial issue of temporary agency work collapsed in 2001, something of a nadir was reached.

New millennium, ‘new’ phase

At the millennium’s start, EU policies took a conspicuously neoliberal turn. On the Euro’s launch, European monetary policy assumed an austere character and the newly agreed Stability and Growth Pact (SGP) constrained the ability of member states to use fiscal policy to stimulate growth. A series of policies also liberalized member state economies. A number of Directives opened European utilities sectors to competition, while the liberalization of financial services attempted to create European shareholder capitalism (Van Apeldoorn, 2008). The ECJ assumed a key role in such processes. The court made four key judgments that affirmed economic freedoms over the right of member states to protect social standards, the 2007 Laval decision even limiting the capacity of European trade unions to engage in industrial action (Dølvik and Visser, 2009). Soft modes of social policy governance also became increasingly popular at European level. The Commission’s Lisbon Strategy, a programme that framed social policy in terms of supply-side ‘employability’, used the Open Method of Coordination (OMC), a form of ‘new’ governance that sought to achieve objectives through non-legally binding targets. Certain critics derided such methods as ‘toothless’ (Copeland and ter Haar, 2013).

The European social dialogue also changed at the millennium’s turn. As a consequence of factors such as the collapse of negotiations over temporary agency work, the prevalence of the OMC and impending enlargement of the EU to include former Communist countries with lower social standards, the dialogue took a more flexible turn that became known as the ‘new phase’ (Prosser, 2006). The new phase was distinguished by the autonomous stance of the European social partners. After a key social partner declaration to the December 2001 Laeken European Council considered to herald the start of the new phase, voluntary negotiations were held at both cross-industry and sectoral levels and led to a range of soft and non-binding outcomes. One of the centrepieces of the new phase was a series of cross-industry agreements implemented via the non-legally binding implementation route. In line with the Social Protocol’s first implementation option, the Telework Agreement (2002), Work-related Stress Agreement (2004), Harassment and Violence at Work Agreement (2007) and Inclusive Labour Markets Agreement (2010) were all implemented via the ‘procedures and practices specific to management and labour in the member states’. This mode of social dialogue was one particularly favoured by employers; although the ETUC concluded such agreements, trade unions continued to agitate for legally binding dialogue.

The new phase also coincided with the increasing importance of sectoral dialogue. As SSDCs expanded numerically and their output proliferated, attention increasingly shifted from the cross-industry dialogue to the sectoral level (Degryse and Pochet, 2011; Keller, 2003a). Nor did the sectoral dialogue go unaffected by the dialogue’s soft turn. Certain sectors continued to reach agreements enforced via Council Directive, yet others began to implement agreements via national procedures and practices. Non-legally binding codes of conduct, declarations and joint opinions were also increasingly produced; hundreds of such texts were indeed concluded. Output moreover continued to vary between sectors. Industries characterized by Europeanized commercial and political profiles leant towards the conclusion of agreements implemented via both implementation routes, while those lacking these prerequisites tended to produce soft output with no basis in the Treaty.

A first characteristic of the non-legally binding output associated with the new phase was its weak effect in member states. Certain authorities defended the record of social partner soft law (Visser and Martin, 2008), yet a consensus emerged that the impacts of outputs like the Telework and Work-related Stress Agreements were disappointing (Ertel et al., 2010; Larsen and Andersen, 2007). Much criticism was aimed at the procedural implementation of such agreements. Studies found that the agreements were not implemented consistently with ‘national labour market traditions’ (Larsen and Andersen, 2007: 196) and that non-implementation at lower levels was rife. In analysis of the implementation of the Telework and Work-related Stress Agreements in four countries, Prosser (2011) discovered widespread indifference at sector and firm levels. Fire consequently focused on such agreements’ national procedures and practices implementation clause (Keune and Marginson, 2013: 487–8). Though the use of legal implementation routes in certain countries with uncoordinated social dialogue structures meant that the agreements did not achieve the poor coverage some critics had expected in such contexts, in other countries with disorganized industrial relations systems this was indeed the case. Other problems became manifest, notably the tendency for national procedures and practices to be contested and for certain actors indispensable to national procedures and practices to be excluded from implementation processes; this ensured that coverage of the agreements was sometimes not optimal in countries with corporatist social dialogue structures.

The substantive impact of such agreements was also considered disappointing. Social partners were often critical of the strength of the wording of the agreements, while others regarded the subjects of the agreements to be at the periphery of the employment relationship. Such tendencies were more pronounced in Western European countries. Because such member states often had pre-existing regulation on issues such as teleworking and work-related stress, in contrast to Central and Eastern European (CEE) countries in which such topics were frequently unregulated, little was typically contributed to the substance of employment relations (Prosser, 2011). The manifold codes of conduct, declarations and joint opinions produced by SSDCs fared little better. Such output was not even endowed with the procedures and practices implementation clause and was often condemned to national social partner indifference (Keller and Weber, 2011). In a study of the implementation of three SSDC texts in 12 member states, Perin (2014) learnt that in countries with underdeveloped social dialogue structures there were frequently no attempts at implementation.

A second characteristic of this output was its sometimes weak association with traditional industrial relations topics. Consistent with the Lisbon strategy’s preoccupation with supply-side ‘employability’, the new phase focused on themes that moved further from the ‘redistributive’ topics typically negotiated in national systems (Prosser, 2006). In addition to non-traditional subjects such as teleworking and work-related stress that were addressed at the cross-industry level, myriad sectoral texts focused on topics such as lifelong learning and corporate social responsibility. Some researchers even perceived certain SSDC texts to primarily fulfil a lobbying function. In studies of the modus operandi of such committees, it was concluded that they, in large part, existed to lobby the European public authorities rather than to function à la national sectoral regimes (De Boer et al., 2005).

The European social dialogue had thus reached something of an impasse by the end of the 2000s. Notwithstanding the multiplication of SSDCs and the conclusion of hard and soft agreements in certain sectors, the dialogue appeared undermined by its soft output and the associated problem of piecemeal implementation outcomes. Predictions of spill-over, not uncommon at the time of the Social Protocol’s conclusion, had largely disappointed. There were indeed grounds for thinking that the dialogue had retreated in efficacy. The softer social dialogue had defenders (Visser and Martin, 2008), yet many compared the record of the new phase unfavourably with the hard agreements of the 1990s (Keller, 2003b; Larsen and Andersen, 2007).

The dialogue’s flaws were made particularly conspicuous by the direction of European economic policy. Though the EU initially recommended fiscal stimulus and short-time working schemes negotiated through social dialogue in response to the economic crisis, after the outbreak of a debt crisis in 2010, European economic governance assumed a strikingly austere character. This was most apparent in the reform programmes that were a condition of European Union-International Monetary Fund (EU-IMF) emergency loans. In near-bankrupted Greece, Ireland and Portugal, measures were implemented that markedly liberalized dismissal protection and collective bargaining (Ioannou, 2013; Stoleroff, 2013). More solvent member states were scarcely spared this agenda. ECB purchase of Italian and Spanish bonds was contingent upon labour market de-regulation in the countries (Meardi, 2014), while pacts centralizing EU economic governance involved spending cuts in other member states.

This centralization of EU economic governance involved a major overhaul of European political and economic competences. The 2011 ‘six-pack’ regulations strengthened preventive and corrective elements of the SGP, while the 2012 Fiscal Compact elaborated upon the Pact’s fiscal terms and allowed the ECJ to impose financial sanctions on non-complying member states. Influence on national policy processes was also enhanced. The annual EU semester system, a fortified version of the OMC, involved the formulation of country specific plans by the European public authorities and consequent EU-level review of national implementations. National reform programmes indeed prescribed detailed labour market reforms. In the country-specific recommendations (CSRs) published annually by the European Commission, wage retrenchment and collective bargaining de-centralization were often exhorted. Certain commentators noted the deep neoliberalism of such guidance and expressed the concern that the plans trespassed on national social partner autonomy and violated the exclusion of pay from European social policy (ETUC, 2014; Stockhammer, 2014).

What form will the future European social dialogue take?

Whatever form the European social dialogue has taken until this point, the centralization of European economic governance throws into question the shape which the dialogue will assume in the future. The following three scenarios, based on existing readings of the dialogue and the evolution of national social dialogue systems, are foreseeable:

The European social dialogue will become broader and more redistributive

Spill-over theorists have periodically expected deepening European integration to prompt a system of Euro-corporatism (Falkner, 1998; Haas, 1958). The onset of a European industrial relations regime was foreseen at the time of the EEC’s creation (Dunlop, 1958: 75), while a European pay system that impeded wage dumping was hoped for after the Social Protocol (Kim, 1999: 418). This view has nevertheless for many years appeared implausible. The various difficulties identified at the time of the dialogue’s inception, namely the issues excluded by the dialogue, the unwillingness of European employers to engage in meaningful negotiations and the limitations of the Commission’s ‘shadow’ have proven particularly stubborn and a system of Euro-corporatism has flatly failed to emerge. Given the retreat of redistributive politics in Europe since the onset of the crisis, the advent of such a regime appears a more distant prospect than ever.

In the light of the failure of Euro-corporatism to transpire, the ‘optimist’ reading of the dialogue has of late become less ambitious. Some have thus merely anticipated a modest deepening of the sectoral dialogue (Degryse and Pochet, 2011: 156), whereas authorities more concerned with processes than outcomes (Welz, 2008) have declared the dialogue a system of Euro-corporatism as it exists. The recent centralization of European economic governance in turn leads one to ask whether developments will turn the way of more cautious optimists. Euro-corporatism remains implausible, yet the onset of a broader and deeper European social dialogue represents a conceivable scenario. This system might involve an enhanced role for the social partners, negotiations on a greater range of issues and an output that is more redistributive.

Certain contemporary developments will buoy those who advocate this view. Not only has the European sectoral dialogue numerically multiplied in recent years, but sectors in which favourable preconditions exist have shown proclivity for both legally and non-legally binding agreements (Degryse and Pochet, 2011). Some initiatives emanating from the European Commission additionally suggest that a broader European social policy may be on the horizon. Formal pressure from the Commission for European minimum wages (European Commission, 2012a), of a non-legally binding character but significant in the context of debate in Germany over the issue, was suggestive of a wider social policy mandate than that adopted at European level thus far. The integration of employment goals into CSRs and a new European Commission employment and social policy indicators ‘scoreboard’, both measures that strengthen social elements of the semester process, are additionally indicative of the fortification of European social policy. The European social partners are also poised to take on new duties. Following social partner petitions, the Commission foresees greater social partner involvement in the European semester process and social partner participation in the employment and social policy ‘scoreboard’ (European Commission, 2013). The social dialogue indeed has influential supporters in Brussels; Commission President Jean-Claude Juncker’s 2015 remarks that he considers himself ‘the president of social dialogue’ were widely publicized (Vincenti, 2015).

The European social dialogue will become a means of EU-level wage control

Though generally not addressed as a possibility in the literature on European social dialogue, the predominant trend in national corporatism over the last two decades has been wage restraint. Originally to fulfil the conditions for EMU and more recently as a means of managing economic crisis, national social partners have concluded peak-level agreements that have sought to constrain wage growth (Rhodes, 2001). Pay has all the same been omitted from the social dialogue thus far. Not only does the EU treaty explicitly exclude pay from European social policy’s remit, but employers refuse to countenance EU-level negotiations on the issue.

Certain clarifications nonetheless need be made. The first is that pay’s exclusion from EU political competence is not an insurmountable impediment to social dialogue on the issue; the OMC has long addressed a topic such as pensions where the treaty-basis for EU action is weak (Eckardt, 2005) and CSRs regularly touch on the performance of national wage-setting institutions. Second, if employers were to perceive benefit in centralization of some aspect of the pay issue, as occurred in national systems in the 20th century’s first half (Crouch, 1993), their disposition to European social dialogue on pay might become revised.

The European public authorities nevertheless appear to be the most likely instigators of social dialogue on pay given their political pre-eminence. And, seeing as rising labour costs are a key concern of the European public authorities and European economic governance is generally centralizing, it is plausible that such agreements will begin to be concluded. Such pacts would likely be recommendatory rather than binding, given the need for lower-level flexibility, and potentially sectoral in scope, given that the sector is the predominant level of pay bargaining in the Eurozone. If such agreements were concluded, it is all the same probable that they would assume a notably austere form. European economic governance has of late become conspicuous for its deep neoliberal hue and future attempts at EU wage control would likely aim to impose stringent limits on wage growth, while offering unions limited compensatory gains. Rather than facilitating the pan-European fortification of working conditions long hoped for by the dialogue’s champions, such a development might therefore come to be regarded as a further cause of the commodification of European labour markets.

Though such a system appears reasonable in theory (and indeed has done for many years; see Coldrick, 1998) and the prospect of it taking root in the longer term is fair, the onset of such a regime does not seem quite imminent. Not only have the European public authorities been historically content to rely on interest rate governance as a means of wage restraint, but tentative steps in this direction have been eschewed by social partners. A December 2012 European Commission discussion note, proposing tripartite ‘reflection on the economic, employment and social implications of wage developments across Europe’ received an unenthusiastic reception from employers and trade unions (European Commission, 2012b). Unions took particular umbrage at Commission proposals to further enhance flexibility in wage determination and asserted that the macroeconomic dialogue already functioned as a consultative tripartite forum.

This episode nevertheless hints at two possible near-term developments. First, EU-level action on wage determination in member states that involves the European social partners is imaginable. Since the onset of the crisis, the European public authorities have shown increasing inclination to demand reforms of national wage-setting institutions via CSRs and ad hoc interventions in crisis-stricken countries (the most egregious example of this being the secret letters sent by the ECB to the Italian and Spanish governments making purchase of the countries’ bonds conditional upon bargaining decentralization; see Meardi, 2014). Whatever union opposition existed to these measures, it is thinkable that unions will become involved in their design in efforts to minimize their adverse impact. The likelihood of this increases if, as the ETUC and the European Commission desire, the European social partners assume a greater role in the semester process.

A second conceivable development is enhanced social partner consultation over EU-level wage policy. The European trade union movement has declared itself open to greater consultations on wage developments in member states and it is plausible that these discussions will take place in the context of the existing macroeconomic dialogue. This would represent a ‘forum-shift’ given the traditional preponderance of the cross-industry and sectoral social dialogue, yet social partner discussions on wage developments in the macro-economic dialogue (or alternatively within the semester system) are thinkable, given the traditional omission of pay from the regular dialogue. In the medium-term, such deliberations could transmute into the soft coordination of wage bargaining. Guidelines for lower-level negotiators, resembling those used at peak-level in a country like the Netherlands, would follow the trend for soft governance and could be issued at the European sectoral level. Trade unions would likely require social policy concessions to be drawn into such a system, however. Whether such quid pro quo could form the basis for a more substantial system of exchange in the longer term, combining wage constraint with limited social policy concessions à la Irish social partnership, is a more open question.

Neither of these developments is inevitable, however. And, given the recent propensity of the European public authorities to impose austere economic policies with minimum consultation, a European wage policy may indeed be developed unilaterally. Such unilateralism might coincide with the third potential trajectory outlined by this article, namely the prospect of the dialogue remaining largely in its current shape.

The European social dialogue will remain largely in its current shape

Whatever the scale of the changes that have affected, and will likely continue to affect, European economic governance, a third and final possibility is that the European social dialogue will remain by and large in its current form. The cross-industry social partners, with no substantial additional competences, will continue to periodically conclude soft agreements and participate in certain consultations with the European public authorities. The sectoral social partners, possibly buoyed by sustained numerical expansion of SSDCs, will continue to issue manifold soft texts that achieve questionable impact. Such a scenario will be familiar to the dialogue’s students, yet the status quo’s maintenance would in fact constitute a noteworthy development. The current dialogue is in short threatened by the speed of progress in the economic sphere. Economic policy is now conspicuously Europeanizing and the dialogue’s failure to muster a corresponding intensification would represent a letdown on its part. The stakes are thus high for the dialogue and theories that hypothesize social policy spill-over; if the dialogue fails to strengthen, it would involve a palpable blow to both.

This scenario is nonetheless far from inconceivable. A first necessary observation is the lack of additional competences buttressing the dialogue; recent changes to the EU treaty have left the dialogue’s two-decade-old competences untouched. Sceptics will assert that the dialogue’s traditional frailties, few of which have dissipated over time, will consequently continue to impede attempts at more significant dialogue. Elements of the European Commission’s recent stance towards the dialogue have also been inauspicious. SSDCs have suffered cuts in funding (Perin, 2014: 363) and the refusal of the Commission to present a hairdressing sector agreement to the Council has attracted social partner ire (EirOnline, 2013). These events mean that some received President Juncker’s 2015 comments sceptically and recent Commission policy towards the dialogue, which departs little from the recent past, will fuel suspicion that the commitment of the Commission remains lukewarm.

The ambiguous relationship between deepening European economic integration and the dialogue’s own development will also not escape the critical eye. The course that the dialogue has taken since the millennium’s turn, namely softer dialogue accompanying an austere European economic regime, indeed suggests that deepened and neoliberal economic integration can co-exist with a weakening dialogue. One may even argue that the two are complementary; the soft dialogue of the 2000s was after all consistent with the Commission’s commitment to neoliberalism and aversion to hard regulation. There are thus reasonable grounds for supposing that the status quo will endure. The dialogue may in other words continue to produce predominantly soft output at both cross-industry and sectoral levels, this output in turn marked by insubstantial implementation outcomes. Sectors where conditions for dialogue are particularly auspicious may reach occasional hard agreements, yet such outcomes would likely prove exceptional and elude the critical cross-industry level. It is even possible that European trade unions may redirect attention towards ‘bottom-up’ strategies like collective-bargaining coordination. Such efforts avert many of the institutional problems associated with the social dialogue and there is evidence that they have become increasingly attractive to unions (Bieler, 2005; ETUC, 2013; Traxler and Brandl, 2009).

Reflections and future trajectories

Recent reforms of European economic governance thus provide rich grounds for analysis of the social dialogue’s emergent nature. If political forces are conducive, it is plausible that the European social partners will exert enhanced influence on wage determination in member states. This role may take the form of soft recommendations to sectoral negotiators and/or agreement on reforms to national wage-setting institutions and at first may merely take root in sectors with favourable conditions or, at the cross-industry level, on an ad hoc basis. In the longer term, this may trigger elements of political exchange. More redistributive aspects of the Commission’s social policy programme, based on widening notions of the Commission’s employment and social policy mandate à la recent Commission action on European minimum wages and the incorporation of social objectives into the semester system, may form a part of this relationship. Such a system would nevertheless likely be one largely ‘competitive’ in nature and would at best offer unions concessions tolerable enough to keep them at the bargaining table.

Whether such a regime will establish itself on more than a temporary or sporadic basis is an open question however, for pressures in favour of the status quo remain formidable. Treaty change institutionalizing such a system remains a distant prospect and the limited mobilization capacity of social partners at the EU level makes one doubtful that social partner initiative will yield enduring change. Such factors make one suspect that the developments hypothesized above will occur merely on an ad hoc basis or in those sectors with particularly auspicious conditions for integration and that the dialogue’s current form will remain largely intact. The present regime’s endurance does not exactly imply that its stock will remain steady however. If the dialogue persists in its current shape while a European economic regime operating on unilateral lines gains substantially in competence, it appears doomed to become ever more peripheral to events at Europe’s heart.

The case of the European social dialogue is in turn pertinent to theories of European social policy predicated on spill-over, mainly in terms, we conclude, that are inauspicious for these approaches. Though the European social partners’ original conquest of political space, the multiplication of SSDCs and the prospective involvement of social partners in the European semester can be linked with functional, political and geographical forms of spill-over (Falkner, 1998; Keune and Marginson, 2013) and demonstrate the importance of social partner institutions in the integration process (Kaminska and Visser, 2011), spill-over approaches are less adept at explaining the dialogue’s longer-term trajectory. Particularly conspicuous is the dialogue’s failure to develop into the Euro-corporatist system hoped for by certain writers. The dialogue’s problems are documented by literature that charts shortcomings in organization, output and implementation; unless one privileges procedure over output, the dialogue little resembles a corporatist system and has exhibited spill-over merely on a piecemeal basis.

The prospect of the dialogue developing in the manner foreseen by spill-over theory is also unpromising. Though the economic pressures considered necessary precondition for this are increasingly present, the dialogue’s historic response to such processes suggests that optimists will be disappointed anew. If the dialogue is to take on new competences in future years, it is indeed possible that these will involve the restraint of lower-level social partners. Spill-over would accordingly take an austere form, this being a bitter pill for many of the theory’s proponents. This development would not be necessarily foreign to the European social dialogue, however. Since the millennium’s turn, the intensification of neoliberalism at the European level has coincided with the dialogue’s softening.

The case of the dialogue is also indicative of a wider inability of spill-over theory to explain developments in European social policy. Though certain studies have argued for such an effect (Caporaso and Tarrow, 2009; Warleigh-Lack and Drachenberg, 2011) and spill-over theories appear applicable to other policy areas (Niemann and Ioannou, 2015), evidence in the social field is somewhat limited. European social policy’s legal competences have not significantly broadened in over two decades and in this time output has conspicuously softened (Copeland and ter Haar, 2013). Such trends have not gone unnoticed by critics of spill-over; many have indeed observed the paucity of evidence for the phenomenon in social policy (Talani, 2014: 191). Given these developments, there appears little reason to expect European economic governance’s centralization to rejuvenate European social policy. The example of the dialogue, specifically its capacity to soften as European-level neoliberalism intensifies, even suggests that the inverse will occur.

Such a turn of events bodes ill for the European social model more generally. National regimes have been under duress since the onset of the crisis and scholarship attests to the disintegration of socio-economic rights in member states (Ioannou, 2013; Meardi, 2014). If European social policy were to further retreat, as difficulties with the dialogue and spill-over theory suggest, national systems would be dealt a further blow. This is alas not an unlikely prospect and would give impetus to arguments that emphasize the serious tension between the EU and social democracy (Streeck, 1994).

Where such developments leave the dialogue as a vehicle for the European trade union movement’s aspirations is another question. The dialogue’s limited headway in two decades and its discouraging future prospects may indeed be a source of some concern for unions; for in that time, marked economic integration has taken place. In another epoch, the association of trade unions with an austere European economic regime may have inspired an unforgiving verdict. In post-war societies marked by labour’s ascendancy, leftward critics of the day’s corporatist regimes asserted that they ‘incorporated’ working-class interests (Panitch, 1976). Such a verdict would today be unfair. Developed economies have been characterized by the ascendancy of business since the 1980s and the various attempts at national and European tripartism made since then have represented unions’ best chance of influence. Whether this is the case with the present highly neoliberal EU economic regime is a different matter. And, discounting the slim possibility of the European social dialogue assuming a more distributive dimension, the prospect of the dialogue acting as a means of wage restraint or remaining in its current soft form may prompt elements of the union movement to reassess the value of engagement with the European public authorities.

Footnotes

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

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