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Wages and European Economic Governance State of play A ugust 2012

Wages and European Economic Governance State of play A ugust 2012. IndustriALL Collective Bargaining Summer School , Palermo rjanssen@etuc.org. A monster with many heads. I. EU policy semester , starts with AGS, ends with specific country recommendations …

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Wages and European Economic Governance State of play A ugust 2012

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  1. Wages and EuropeanEconomicGovernanceState of playAugust 2012 IndustriALL Collective BargainingSummerSchool, Palermo rjanssen@etuc.org

  2. A monsterwithmanyheads I. EU policysemester, startswith AGS, endswithspecific country recommendations… II. First year of the new Excessive ImbalancesProcedure: Country reports III. Troikafinancial ‘bail outs’ and the ECB policy of (promising) to buysovereigndebt if labour markets and wages are made more flexible IV. Commission employment package: Wage Monitoring Group V. IMF and ILO involvingthemselvesthroughgeneral reports and recommendations: G-20 process Manyheads, one single message (with few exceptions): Downwardswageflexibility

  3. I. Country recommendations on wages • Commission proposalfrom the 30th of May • 17 out of 27 MS getrecommendation • General line: Put downwards pressure on wages and bargaining • Wage indexation ,everywherewhereitstillexists (BE, CY,LU,MT plus SP), isbeingquestioned • ‘Magicalformulae’: Alignwageswithproductivity • Macro dimension to influence generaldynamics of wages ( opt out clauses for BE; continue withwagemoderation for FI; improvewage setting atsectorlevel in IT; continue with labour marketreform for SP;) • Micro dimension: More wagedifferentiation to takedifferences in workerproductivityinto account (SW: encourage wageflexibility, notablyat the lower end of the wagescale) • Even minimum wagesfeel the heat (France, Slovenia,Hungary: anydevelopment in MW to support jobs and competitiveness/’contain the increase of the MW) • Troika countries mentioned (RO,PT,IRL,GR). • Exception is Germany, but verycarefulwording (‘create the conditions for wages to grow in line withproductivity’)

  4. II. Country reports from Macro ImbalancesProcedure

  5. III. Troika bail outs and ECB dominance • Troika Bail Outs: Direct intervention in wages, seeupcoming ILO publication/seminar • ECB: A ‘WageDeregulator of First Resort’ in return for the ‘Lender of limitedresort’?

  6. IV. Commission’sEmployment package • « Wage setting mechnaims to ensure real wagegrowthreflectsproductivitydevelopments, local labour markets and competitive positions » • « Althoughwagemoderationmightbenecessary for some, targetedwageincreasesmightbefeasiblewherewages have laggedbehindproductivity » • « Setting minimum wagesatappropriatelevels, wagefloors to besufficientlyadaptable and differentiated to uphold labour demand »

  7. Commission’sEmployment package • Proposal for a « Tri partite wage monitoring group » • State of affairs: • DG Employmentwillundertake « long termanalysis » , involving EU social partners. • Meanwhile, wagerecommendationsfromEuropeanpolicysemesterwill continue • ‘Light’ consultation ahead of AGS, technical meeting between Commission (DG V only?) and social partners (October?)

  8. V. Forging the Washington-Brussels/Frankfurt/Geneva Concensus ? • Joint IMF- ILO report to G20 Los Cabos: • « Maintainingpurchasing power of minimum wagesataround 30 to 40% of medianwagessustainsdemand and reducespoverty and inequalities » • « Statutorywagefloorssystematically set abovethatlevelentails the riskthatthesebenefitswouldbe more than offset by lost job opportunities, especially for the young and lowskilledworkers » • Caveat: Undoubtedly good work in manyotherworkfrom the ILO

  9. The problemfor Europe (West and East !)

  10. Is ithaving an impact ? YES!

  11. Is ithaving an impact ? YES!

  12. Is ithaving an impact ? YES!

  13. Is ithaving an impact ? YES!

  14. To end :Parliamantary question on recommendation on Belgianwage indexation (‘move to all in indexation’) • Is theresufficientlegal basis? (art 121) • Should Commission recommendations respect the provision that national practices and institutions on wages are to berespected ? • Is the recommendation on Belgian’s indexation system enforceable ?

  15. Replyfrom the Commissioner • Legal basis of suchrecommendationsis correct and compatible with Social chapter of Treaty and Charter of FundamentalRights • Yes, theyshould and they do since country recommendationsexplicitly state the reformshouldbetaken in consultation with social partners and in accordance with national practices • Enforceableunderregulation excessive imbalances and regulations on excessive deficits

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