ECONOMIC AND MONETARY UNION
Wage policy in EU member states "well prepared" to meet EMU requirements
The introduction of Economic and Monetary Union (EMU) has profound implications for the role of wage policy in the European Union member states. A new comparative study by the European Industrial Relations Observatory (EIRO) explores the extent to which the national systems of pay determination across Europe are prepared to meet the new requirements of EMU, examining both the outcome and the institutions of wage setting.
What you will find in the report
Drawing on new research by the national centres of EIRO, the report examines:
long-term wage growth among EU member states in relation to national economic performance
the different levels at which wage bargaining is conducted
the various forms of wage co-ordination across sectors
the use of macroeconomic guidelines and/or criteria for wage policy within collective agreements or as part of social partners' justification of wage claims and wage offers
the gender aspects of wage policy.
Conclusions
The EU's Broad Economic Policy Guidelines and the "European employment pact" emphasise the importance of wage developments that are consistent with price stability, competitiveness and non-inflationary economic growth and take into account labour productivity gains.
EIRO’s study finds that wage policy in the EU countries and Norway seems "well prepared to meet the new requirements of EMU".
The report observes:
"Wage developments since the 1980s have almost always been relatively moderate and, if current trends continue, the return of inflationary pressures arising from wage developments does not seem very likely."
EIRO warns, however, that there may be a risk of a deflationary trend if more countries follow a "competition-driven" wage policy and real pay growth dips far below increases in labour productivity.
"In order to prevent both the inflationary and the deflationary scenario, what might be needed is a more transnational or even a European approach to wage co-ordination."
Want to know more?
Title: Wage policy in EMU, European Industrial Relations Observatory.
Methodology: the comparative study was compiled on the basis of individual national reports submitted by EIRO's national centres.
Availability: visit the EIROnline database which can be found at www.eiro.eurofound.ie
Take a look at the full comparative study . . . www.eiro.eurofound.ie/2000/07/study/index.html
An edited version of the report can be downloaded in pdf format. (This takes about one minute to download and you will need the free Adobe Acrobat Reader.) Jump to . . . www.eiro.eurofound.ie/pdf/eo00-4.pdf
What is EIRO? The European Industrial Relations Observatory is a major project of the Dublin-based European Foundation for the Improvement of Living and Working Conditions. Established in 1975, the European Foundation is an autonomous body of the European Union.
EIRO gathers and stores information and analysis on developments in industrial relations in the 15 EU Member States, plus Norway, and at European/international level.
It is made up of the 16 National Centres and an EU-level Centre, from which information and analysis flows in to a central unit at the European Foundation. This information is then processed and entered into a database, EIROnline, which is made available through the worldwide web as the main means of dissemination.