Euro-FIET gears up for EMU

At its March 1998 conference, EURO-FIET- which brings together trade unions representing private sector services and white-collar workers from across Europe - launched a strategy paper responding to the anticipated impact of Economic and Monetary Union on employment and collective bargaining. The paper emphasises the need to recognise the social dimension of EMU and to coordinate bargaining strategies at sectoral level across the Union. Since the conference, Euro-FIET has taken some first steps towards implementation of its strategy.

With the deadline for EU Economic and Monetary Union (EMU) approaching rapidly, trade unions across the Union have been taking steps to prepare themselves for collective bargaining under a single currency. A joint statement on signed in September 1998 by a number of unions from Belgium, Germany, Luxembourg and the Netherlands in the Dutch town of Doorn (DE9810278F) highlighted the increasing momentum towards joint action in this field. The European Trade Union Confederation (ETUC) and its affiliated European Industry Federations have been at the forefront of calling for coordinated action in the area of collective bargaining. So far, concrete activities have been slow in taking shape, but the momentum is set to increase with the approach of the EMU deadline. Here we focus on the steps taken by the European Regional Organisation of the International Federation of Commercial, Clerical, Professional and Technical Employees (Euro-FIET) to prepare for EMU.

Euro-FIET sets out its strategy for EMU

Euro-FIET adopted a strategy paper on Economic and Monetary Union: the impact on employment and collective bargaining at its eighth conference, held in Cardiff on 29-31 March 1998 (EU9807116F). Euro-FIET is one of the largest of the European Industry Federations affiliated to the ETUC and its conference - held under the theme of Vision for a new Europe- attracted over 500 participants from 126 unions in 44 different countries.

EMU was one of the key issues discussed at the conference. A panel discussion chaired by Euro-FIET vice president Roland Issen focused on three main areas of concern implicit in the EMU strategy paper:

  • the need to ensure that employment issues are at the centre of European policy-making;
  • the need for the European Central Bank (ECB) to promote employment and social issues; and
  • ensuring that steps are taken to prepare Euro-FIET's membership for the impact of the single currency, the euro.

Euro-FIET and the ETUC have pledged conditional support for EMU, and crucial to this support is the belief that a coordinated European response to unemployment is required. In particular, the strategy paper argues that the focus of EMU should not be limited to financial stability but must be oriented towards the promotion of economic recovery and employment creation. Euro-FIET believes that the ECB must be flexible, enabling it to respond to economic shocks and protect and enhance employment, rather than rigidly enforcing policy in relation to the EMU convergence criteria. In the paper, Euro-FIET explicitly asserts its belief that it is possible to pursue the creation of the single currency and at the same time reduce unemployment and secure social and economic stability.

In addition, the paper advocates that there must be an obligation on the part of the ECB to consider the employment consequences in decision-making associated with EMU. In relation to this point, Euro-FIET supports the establishment of an "economic coordination pact" to promote employment, growth and fiscal policy development. This would also serve as a policy counterweight, providing an additional perspective in relation to the ECB.

As in the Euro-FIET conference's resolution on "achieving a Social Europe" (EU9807116F), the paper places considerable importance on the role of the social dialogue in assisting in the fight against unemployment. In particular, it asserts that further consideration should be given as to how social dialogue at all levels across the EU can have an impact on reducing unemployment.

Lastly, Euro-FIET envisages a reduction and reorganisation of working time as a key component in a successful European employment strategy. Euro-FIET sees the introduction of a 35-hour working week and other forms of reducing annual working time as a vital ingredient in safeguarding existing employment, creating new jobs and improving living and working conditions at the workplace and beyond.

Impact of EMU on the finance sector

The Euro-FIET paper foresees that EMU will have important implications across a range of sectors and proposes that its trade sections (eg, commerce, finance or property services) should establish an action plan to address the consequences of the introduction of the euro on their sector. It is recommended that representatives from the various trade sections should adopt a coordinated approach and share information through joint workshops. At the same time, however, it is recognised that EMU will have a particular impact on the finance sector.

At a joint meeting in June 1997, Euro-FIET's banking and insurance sections had adopted a 10-point plan seeking greater consultation and dialogue with European and national institutions on employment issues relating to the euro, guarantees of job protection and retraining for workers who become redundant as a result of the introduction of EMU. The plan (annexed to the new strategy paper) demands, in particular, that social partners should not accept job losses as a consequence of the euro and that national and European-level employers should enter into a constructive dialogue to discuss issues relating to the introduction of the single currency. The 10-point plan states that Euro-FIET should develop resources and work with European Works Councils (EWC s) established in the finance industry to ensure that issues regarding the introduction of the euro are discussed as part of EWC meetings. In addition, it calls for employers in the sector to put in place comprehensive training and retraining programmes to prevent job losses.

In the plan, Euro-FIET also demands greater dialogue with institutions such as the Council of Ministers and the European Commission, and in particular a full social dialogue with the ECB. Lastly, Euro-FIET strongly advocates that European central bankers and European government officials must recognise the social dimension of EMU and must recognise the legitimate rights of unions to information, consultation and negotiation on changes that are occurring within the central banking system.

The impact of EMU on collective bargaining

From a trade union perspective it is foreseen in some circles that a single European currency will potentially mean greater pay transparency across Europe and subsequently greater competition, implying a downward pressure on pay and working conditions. To counter the perceived pressure on collective bargaining structures and equitable labour standards, Euro-FIET believes that the first steps need to be taken on the path towards a "European system of collective working relations". If these steps are not taken, Euro-FIET considers that economic adjustments will have the effect of creating higher levels of unemployment and increased pressure on core labour standards. This is viewed as running counter to the goals of employment creation and social cohesion.

To prevent problems associated with economic adjustments resulting from EMU, such as "wage dumping", Euro-FIET states that it has a role to play in promoting greater solidarity between trade unions. Euro-FIET clearly recognises that it needs to work closer with unions to foster a cooperative strategy based on coordinated bargaining strategies between unions affiliated to FIET, Euro-FIET and ETUC. Euro-FIET believes that the only way to counter the pressures that will inevitably be brought by the single European currency is to develop a collective bargaining strategy that will ensure the creation of "European social norms". The three main areas where Euro-FIET is currently planning to coordinate bargaining strategies are wages, (average) working time (on a weekly and life-time basis), and education and training. It is expected that coordination will be concentrated at the levels of trade sections and multinational companies.

Lastly, Euro-FIET stresses its desire to have a greater role in discussions on wider economic policy considerations such as industrial policy, tax harmonisation, structural change and competition policy at both national and European levels.

Follow-up to the strategy paper

Since the launch of Euro-FIET's paper on EMU, a number of developments have been initiated which mark the first steps towards achieving the goals envisaged in the strategy. Firstly, social partners from the finance sector met in a joint seminar on 29-30 June 1998 to discuss the results of a survey on training for employees in relation to the developments and changes that EMU may bring. The survey revealed that generally there was a lack of preparedness in relation to this issue, particularly in the insurance sector. The seminar was seen as useful in highlighting the present gaps and in identifying what steps needed to be undertaken by the employers with regard to preparing their employees for change.

The second activity on which Euro-FIET has been concentrating is the development of social dialogue with employers in both the banking and insurance sectors - to date, the exchange of information is seen to have been more successful in the latter. In addition, Euro-FIET has since 1997 attempted to develop a formal dialogue mechanism with the ECB. Initially, the ECB was reluctant, as this dialogue had no legal basis. However, with a change in its legal structure on 30 June 1998, the institution has, it is claimed, committed itself morally, rather than legally, to an active dialogue in relation to EMU.

In relation to developing collective bargaining transnationally on a sectoral basis, this is still in its infant stages. At the annual Euro-FIET trade section meetings, the different sectors are responsible for disseminating information on company, sectoral and national agreements in the form of a report. This has ensured that examples of good practice have been available, and it is hoped that information in this area will be used to stimulate greater coordination between unions on the various bargaining issues.

Lastly, Euro-FIET reports that the first steps have been made in developing cross-continental networks of union representatives and bilateral discussions with some global corporations in the banking sector. This development has been prompted by the EWC Directive, which in some cases provided the framework for the inclusion of issues affecting non-EU or non-European issues in EWC meetings. Resulting from this, closer connections have developed between union federations within and beyond the EU - in the countries of central and eastern Europe, for example - and exchanges of information on working conditions are occurring. This process is at present relatively informal, but the development of formalised structures is a future goal for Euro-FIET. Examples of multinationals concerned include National Australia Bank and the HSBC Group.

Commentary

Clearly, Euro-FIET has developed an extensive strategy in preparation for the advent of EMU on 1 January 1999, making many demands for greater dialogue and consultation at both the national and European levels. At the same time, Euro-FIET is adopting a forward-thinking and constructive approach, as it is recognised that a passive position in relation to EMU may lead to dire consequences for existing levels of social protection and future levels of employment. This progressive approach is essential when considering the disproportionate impact EMU will have on the sectors and workers that Euro-FIET represents, particularly in the case of finance.

The strategy paper places a great deal of emphasis on the role of the social partners in preparing, responding to and managing the changes that EMU will inevitably bring. In particular, it is realised that EMU will create the need for a greater coordination of bargaining strategies at the sectoral level on key issues such as remuneration, working time, and education and training. (Peter Foster, ECOTEC Research and Consulting)

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