1. Trends in collective bargaining in the EU Final conference: “Collective bargaining in Croatia and EU today” Zagreb, 14 October 2015 Dr. Torsten Müller European Trade Union Institute - ETUI

2. Megatrends as challenges for trade unions and CB 1.) Structural change:  Manufacturing to services  Increasing privatisation of public sector 2.) Increase of precarious and and atypical forms of employment 3.) Globalisation makes national regulation more difficult 4.) Neoliberal hegemony – reinforced by crisis Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

3. Main trends in collective bargaining systems across EU 1. Change in political framework conditions: unprecedented degree of direct political interventions 2. Different modes and degrees of decentralization in collective bargaining structures 3. Spread of company-level employment and competitiveness pacts Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

4. EU crisis management Basic assumptions: 1. Crisis is primarily a crisis of cost competitiveness 2. Lowering labour costs is the key to regain (price) competitiveness and to address macroeconomic imbalances!!! Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

5. EU crisis management New European Economic Governance: A new European interventionism in the area of wage policy through  European Semester/European Imbalances procedure: half of the EU Member states received recommendations  Troika /Memorandum of Understanding Policy measures:  Direct intervention into wage developments by cutting and freezing public sector and minimum wages  Structural reforms of wage setting institutions to increase downward flexibility of wages Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

6. Intervention into national collective bargaining DG ECFIN 2012: “Employment friendly reforms”  Decreasing bargaining coverage  Decreasing extension of collective agreements  Decentralizing bargaining systems  Removing or limiting the favourability principle  Introducing/extending possibilities to derogate from higher level agreements  Overall reduction of wage-setting power of trade unions Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

7. Continuity DG ECFIN approach DG ECFIN 2015: “Moreover, major reforms in the labour market, such as decentralised wage bargaining and more flexible wage arrangements, … as well as past wage moderation will also support job creation.” Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

8. Country-specific recommendations 2011-2014 Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

9. Measures in countries under international surveillance Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

10. Abolition of additional benefits in public service (2008-13) Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015 GreeceHungaryPortugalRomaniaSpain 13 th /14 th monthly pay Cuts in pension entitle- ments Accomo- dation allowance Medication allowance Food allowance

11. Eingriffe in nationale Mindestlöhne Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015 22 % cut (32% cut for young workers under 25) in 2012 Freeze until the end of the assistance programme Freeze 2011- 2014 No MW rise without approval of Troika 1 € cut in 02/2011 rescinded in 07/2011 Freeze since 1997 Suspension of automatic Indexation No MW rise without approval of Troika

12. National hourly minimum wages (in Euro, January 2015) Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015 Quelle: WSI-Minimum wage database

13. Minimum wage in % of median wage Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

14. Real compensation in the EU 2010-2014 Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

15. Number of collective agreements Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

16. Decollectivisation of industrial relations Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015 PortugalSpain 2008201320082013 Agreements 2959459873161 Of which company 954845392274 Extension1379 Workers covered 1.8 mio242,00012 mio8.5 mio

17. Collective Bargaining Coverage Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

18. Dominant level of negotiations Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015 Quelle: European Commission 2015: Industrial Relations in Europe 2014

19. Implications of interventionist approach 1. Systematic undermining of (cross-)sectoral systems of multi-employer collective bargaining 2. Dramatic decrease of collective bargaining coverage leading in parts to a decollectivisation of industrial relations 3. Pressure on wages: deflationary tendencies and downward wage competition with negative consequences for internal demand. Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

20. Organized de-centralization in northern European countries (Inter-)sectoral agreements define the terms of transferring bargaining competences to lower levels Tools:  Company-level employment pacts  State-sponsored schemes for temporary working time reductions and lay-offs Path-dependent adjustment of existing multi-employer bargaining systems Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

21. Wages and collective bargaining under deflation: alternative approach ● Stabilising and enforcing wage developments: counter deflationary price developments stabilise and increase private demand counter income inequality ● Requires … stop of wage cuts and wage freezes wages increase at least in line with productivity and target inflation more expansive wage developments in the surplus countries ● Requires … strengthening of wage setting institutions Dr. Torsten Müller – Collective bargaining in Croatia and EU today, Zagreb, 14 October 2015

22. Thank you very much for your attention!!! Dr. Torsten Müller Senior Researcher European Trade Union Institute Bld. du Roi Albert II, 5 1210 Brussels Email: tmueller@etui.orgtmueller@etui.org Dr. Torsten Müller – ILO-EPSU Seminar, April 2015 Trends in collective bargaining in the EU