Mixed response to call for wage moderation in wake of attacks on USA

Given the economic uncertainty following the attacks on the USA on 11 September 2001, the Dutch Minister for Social Affairs and Employment has called on the social partners for greater wage moderation in the Netherlands. While employers agree, trade unions see the appealas somewhat premature.

Several weeks after the attacks on the USA on 11 September 2001, Willem Vermeend, the Dutch Minister for Social Affairs and Employment, invited the social partners to a meeting. The minister elaborated on several scenarios in order to clarify the potential consequences of the events for the Dutch economy, based on a number of fundamental economic variables. The most important conclusion drawn by the minister was that the need for wage moderation is now even more urgent than ever (NL0107137F).

During the meeting on 2 October, the VNO-NCW employers' confederation expressed its undivided support for the minister's stance. The Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) and the Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) were less enthusiastic. Both union federations believe that Mr Vermeend's calculations do not provide a sufficient basis for lowering their wage demands and instead prefer to wait for the Central Planning Bureau (Centraal Planbureau) to publish its figures on economic prospects. FNV appeared irritated by what it perceived as 'contaminating the discussion with meaningless figures'. CNV assumed that Mr Vermeend was acting 'in good faith', but wished to postpone any decision on wage moderation until 8 November when the regular autumn debate takes place between the government and the social partners.

Partly as a result of current uncertainties about the economic situation, CNV has postponed announcement of its wage demands for the coming bargaining round, which would otherwise have been put forward in mid-October. In the meantime, FNV has announced its demand for a 4% wage increase in the next bargaining round.

The debate on wage moderation was fuelled by figures published by Eurostat on 4 October 2001. These found that during the second quarter of 2001 the average hourly wage in the Netherlands rose more rapidly than in any other country in the European Union. Wages went up by 5.2% compared with the same period in 2000. Meanwhile, the annual inflation rate in the Netherlands continues to hover around the 5% mark.

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