EU Social Policy in the 1990s: Towards a Corporatist Policy Community (Routledge Research in European Public Policy, 6)

EU Social Policy in the 1990s

EU Social Policy in the 1990s explores the background and development of social policy content and process in the European Union since the policy innovations of the 1991 Maastricht Treaty came into force. The study begins with an analytical overview of schools of thought on European integration which offer useful insights into EU social politics. Building on this framework, the chapters then examine in detail preMaastricht social policy and the ‘social partners’, the innovations of the Treaty itself, and where EU social policy stands at the end of the 1990s. Case studies of European Works Councils, parental leave, and atypical work, are included to highlight the day-to-day processes at work in social policy formation and the major interest groups and EU institutions involved. This is an up-to-date and accessible study which finds that under the EU’s social dimension a corporatist policy community developed in the 1990s. Gerda Falkner concludes by considering the lessons drawn from the EU’s experience, both for integration theory and for the future of Europe’s social dimension. Gerda Falkner is Associate Professor at the Institute for Government and Political Science, University of Vienna.

Routledge Research in European Public Policy Edited by Jeremy Richardson University of Essex, UK

1 The Politics of Corporate Taxation in the European Union Knowledge and international agendas Claudio M.Radaelli 2 The Large Firm as a Political Actor in the EU David Coen 3 Public Policy Disasters in Western Europe Edited by Pat Gray and Paul’t Hart 4 The EU Commission and European Governance An institutional analysis Thomas Christiansen 5 Europe’s Digital Revolution Broadcasting regulation, the EU and the nation state David Levy 6 EU Social Policy in the 1990s Towards a corporatist policy community Gerda Falkner Other titles in the European Public Policy series: European Union: Power and policy-making Jeremy Richardson Democratic Spain: Reshaping external relations in a changing world Richard Gillespie, Ferdinand Rodrigo and Jonathan Story Regulating Europe Giandomenico Majone Adjusting to Europe: The impact of the European Union on national institutions and policies Yves Meny, Pierre Muller and Jean Louis Quermonne Policy-making in the European Union: Conceptual lenses and the integration process Laura Cram Regions in Europe Patrick Le Galès and Christian Lequesne Green Parties and Politics in the European Union Elizabeth Bomberg A Common Foreign Policy for Europe? Competing visions of the CFSP John Peterson and Helene Sjursen Policy-making, European Integration and the Role of Interest Groups Sonia Mazey and Jeremy Richardson

EU Social Policy in the 1990s Towards a corporatist policy community

Gerda Falkner

London and New York

First published 1998 by Routledge 11 New Fetter Lane, London EC4P 4EE This edition published in the Taylor & Francis e-Library, 2003. Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 © 1998 Gerda Falkner The right of Gerda Falkner to be identified as the Author of this Work has been asserted by her in accordance with the Copyright, Designs and Patents Act 1988 All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Falkner, Gerda. EU Social Policy in the 1990s: Towards a Corporatist Policy Community/Gerda Falkner. p. cm. ISBN 0-415-15777-3 (hardback) 1. European Union countries—Social policy. I. Title HN373.5.F35 1998 361.6’1’094–dc21 98–13694 CIP ISBN 0-203-29907-8 Master e-book ISBN

ISBN 0-203-26535-1 (Adobe eReader Format) ISBN 0-415-15777-3 (Print Edition)

Contents

vii ix xi xiii

List of figures and tables Series editor’s preface Preface and acknowledgements List of abbreviations Introduction 1 Political theory and EU politics 1.1 Concepts of the European integration process 4 1.2 The role of organised interests in the policy process 31 1.3 An inclusive analytical framework for the study of EU social policy in the 1990s 52

1 4

2

Social policy from Messina to Maastricht 2.1 The development of the ‘social dimension’ up to the Maastricht Treaty 55 2.2 The European ‘social partners’ prior to the Maastricht Treaty 70 2.3 Synopsis: the ‘social dimension’ before Maastricht 76

55

3

Social policy in the Maastricht Treaty 3.1 The Maastricht innovations 78 3.2 Why it was done: the origins of the Social Protocol 84

78

4

Policy-making under the Social Protocol 4.1 The first case: European Works Councils 97 4.2 The second case: parental leave 114 4.3 The third case: atypical work 129

97

v

vi

Contents 4.4 The practice of the Social Agreement: an overview 146 4.5 Synopsis and the future 149

5

The evolution of social interest intermediation 5.1 The major interest groups and their strategies vis-à-vis the EC social dimension 156 5.2 The development of a negotiation pattern 161 5.3 The issue of representativeness 164 5.4 The role of the ‘state’ 169 5.5 Why a corporatist policy community? The incentive structure 173

156

6

Conclusions and the future 6.1 Towards a corporatist policy community 187 6.2 Group structure follows strategy follows ideations 191 6.3 Neofunctionalism and intergovernmentalism: the lessons from social policy 196 6.4 The role of Euro-level institutions and ideations 200 6.5 Which future for the EU’s social dimension? 204

186

Notes References Index

208 234 253

Figures and tables

Figures 1.1 Corporatism as a two-dimensional phenomenon 1.2 Policy network ideal-types 1.3 Preference/identity formation and European integration theory 2.1 Pre-1991 group set-up and decision patterns in EC social policy 6.1 The evolution of the EC social policy network over time 6.2 Core and periphery of the EC social policy network after Maastricht Tables 1.1 Dimensions of spill-over 1.2 Schools of integration theory 1.3 Subtypes of ‘institutionalism’ 1.4 Genealogy of ‘corporatisms’ in Europe 2.1 Innovative regulative action under the 1989 social action programme 3.1 The attribution of explicit social policy competences to the European Union 4.1 Euro-Works Councils: The preferences of labour and industry 4.2 The European Works Councils Directive (overview) 4.3 The preferences in the parental leave collective negotiations 4.4 The Parental Leave Agreement (overview) 4.5 A comparison of the Parental Leave Agreement and the Commission’s 1983 proposal 4.6 The preferences in the atypical work negotiations 4.7 The Part-Time Agreement (overview) 4.8 Comparison of the Part-Time Agreement and the Commission’s 1990 proposals 4.9 Policy projects under the Social Agreement (overview) 5.1 Towards a corporatist EC social policy community: the incentive structure vii

35 48 53 75 193 194

9 19 22 38 69 82 105 109 118 120 123 135 138 141 150 185

Series editor’s preface

European Union social policy has attracted the attention of a large community of researchers, possibly because it presents the Union with a particularly difficult regulatory problem. How can the Union develop a social dimension to its activities when the member states present such a diverse set of traditions and cultures in this policy area and in a climate of opinion which emphasises competitiveness, de-regulation, and the need to reduce the so-called ‘burdens’ on firms? On the face of it, therefore, social policy seems an unlikely field for integration to succeed at this stage of the EU’s history. The economic benefits are not easy to demonstrate (in the way that the advocacy coalition behind the Single Market was able to do), the interests who stand to gain are thought to be weaker following the march of liberal market ideas throughout Europe in the 1 980s and 19980s, and at least some national governments (particularly Britain) have been strongly opposed to any extension of the Union’s competence into this policy area. Thus, an active social policy seemed destined for the ‘back burner’ of European level politics. Herein lies the fascination of Gerda Falkner’s study. She argues, via case studies of the social policy process, that there has been a degree of social state building at the European level. This has followed quite different lines to social state building at the national level, such as in the case of Bismark and Beveridge, but she demonstrates how policy innovation has indeed occurred in the 1990s. For example, there is a significant amount of coordination of national policies and the emergence of common minimum standards, and, she argues, the Commission could claim that its own social policy ambitions, set out in 1989, are on the way to being realised a decade later. As she demonstrates, there is now an established (perhaps embedded) social policy process at the European level. The main result of this process is that the Commission has been rather successful, despite an unfavourable set of conditions, in getting its legislative proposals through. More importantly, in terms of the contribution of this study to our understanding of the integration process as a whole, is her challenging and controversial ix

x

Series editor’s preface

claim that a corporatist policy community was not only established in EC primary law but was also put into practice successfully after Maastricht. The story is of a developing European policy style in the policy area. Thus. she suggests that there has been a steady development, from a loose, unstructured, issue network towards a traditional (at least for the northern European countries in the post-war period), well organised, and corporatist policy community of actors. The processes by which this transformation came about are analysed in detail, shedding light on the relationship between internal changes within the key interest group (the creation of more ‘action capacity’ and their ‘supranationalistation’) and the development of what she terms a ‘culture of social partnership’. One practical effect of this culture (and, of course. of the Social Agreement itself) is that one of the key elements of policy community politics—trust between policy actors—is emerging as a central feature of the policy process. Thus, she argues, the absence of a fully fledged ‘state’ at the European level does not prevent the type of exchange between public and private actors so characteristic of corporatist policy making patterns seen hitherto in some national social policy systems. What are the effects of this policy making style? The book suggests that the substantive and procedural levels of Union policy making are closely connected, as are national and European actors. This means that the Union has emerged as a key arena or venue for social policy, where communicative processes may not only change tactics, but also national interests and identities. This study of policy making in hard times is, therefore. not just an analysis of the dynamics of policy change in the field of European social policy, important though that is. It is major study, combining detailed empirical findings with a rich array of theoretical perspectives, of the ways in which some kind of European state is being constructed.

Preface and acknowledgements

This book has its origins in a project under the EC’s Human Capital and Mobility Programme. During 1994–5, I had the chance to spend a year of academic leave from my home institution (Institute for Government and Political Science, University of Vienna), as an HCM Research Fellow in the United Kingdom. The Universities of Essex and Warwick were kind enough to host me for six months each. Financial support from the Austrian Research Fund, via a Schrödinger Stipendium, is gratefully acknowledged. The HCM project on the European policy process, directed by Jeremy J.Richardson, offered great opportunities for research and intellectual exchange. Drafts of some parts of this book were presented during various academic conferences, between 1995 and 1997. Among the encounters which provided stimulating intellectual exchange were the European Consortium for Political Research’s Joint Sessions of Workshops in Oslo and Bern (1996: Workshop on ‘The Transformation of Governance in the European Union’, directed by Beate Kohler-Koch; 1997: Workshop on ‘Regional Integration and Multi-level Politics’, directed by Alberta Sbragia and William Wallace); the European Community Studies Association USA’s biennial conferences in Charleston and Seattle; and the 1996 Conference of the HCM Network on the European Policy Process (directed by Jeremy J.Richardson), at the European University Institute in Florence. Thanks to the participants for stimulating discussions and feedback! There is a German saying that behind each successful man, there is a woman supporting him. Well, at the side of this author was a man without whom this book might never have been written. Thank you, Michael! Special thanks also goes to the head of the Institute for Government and Political Science at the University of Vienna, Emmerich Tálos, who provided the favourable working conditions which are indispensable for such an endeavour. A longer version of this manuscript was accepted as a postdoctoral thesis (‘Habilitationschrift’) in political science, at the University of Vienna. xi

xii

Preface and acknowledgements

Last, but not least, many thanks to the large number of experts in EU institutions, national representations, and Euro-groups, who shared their perceptions and insights with me. The manuscript was completed in November 1997, but major later developments were included at the proofreading stage. Gerda Falkner Vienna May 1998

Abbreviations

Art. CEEP COM DG EC ECJ ECOSOC ECT EEC EECT EP ETUC EU IGC MEP OJ QMV SEA TEU UNICE

Article (of EU Treaties) European Centre of Enterprises with Public Participation Commission of the European Communities Directorate General of the EC Commission European Community European Court of Justice Economic and Social Committee Treaty establishing the European Community European Economic Community (i.e. the EC before 1 November 1993) Treaty establishing the European Economic Community European Parliament European Trade Union Confederation European Union Intergovernmental Conference Member of European Parliament Official Journal of the European Union qualified majority voting Single European Act Treaty on European Union Union of Industrial and Employers’ Confederations of Europe

xiii

Introduction

[F]or the political scientist the unification of Europe has a peculiar attraction…. He may see in it, as I do, an instance of voluntary ‘integration’ taking place before his eyes, as it were under laboratory conditions. (Ernst B.Haas 1958:xi)

What the ‘founding father’ of European studies stated on the European Communities in 1958 applies even more to the specific subject of this study in the late 1990s: the establishment of a new Treaty basis for EC1 social policy offers ideal conditions to study effects on the policy process, in general, and effects on the role and the structure of the involved interest groups, in particular. The social policy innovation in EU primary law such as introduced at Maastricht in 1991 (in force since November 19932) is significant. Thus, majority voting was accepted for a much wider range of topics than hitherto (e.g. information and consultation of workers). The explicit Community competences were extended to include a variety of additional social policy issues (e.g. the regulation of working conditions and the integration of persons excluded from the labour market). Furthermore, the role of management and labour was substantially enhanced: they are now responsible co-actors in the decision-making process. This book’s main focus is on this procedural innovation, i.e. on the development of a ‘corporatist policy community’ at the European level. Nevertheless, this study covers both the substantive development of EU social policy and the specific decision-making dynamics. This twofold approach seemed necessary for there is an interdependence between these two levels of analysis. Just as post-Maastricht EC social regulation such as the Parental Leave Directive cannot be divorced from the public-private co-operation that characterises its formulation, the corporatist decisionpatterns set up at Maastricht cannot be explained without paying attention to specific developments at the substantive level of EC social policy before the 1990–91 Intergovernmental Conference (IGC). This implies that not 1

2

EU Social Policy in the 1990s

only material and procedural developments are essentially intertwined but so are ‘day-to-day’ EC policy-making and the ‘grand bargains’ of constitutional reform. The focus of this study is thus at the crossroads between theoretical approaches to European integration, on the one hand, and interest intermediation, on the other. Both bodies of political science literature have to be screened in order to assemble an adequate analytical tool-kit to investigate developments concerning joint social policy standards and the role and structure of relevant interest groups. Therefore, Chapter 1 presents analytical overviews of those schools of thought on European integration which seem to offer useful hypotheses for the study of EU social politics (including neofunctionalism, intergovernmentalism, ‘interlocking politics’ or multi-level approaches and new institutionalism; see section 1.1). The aim is not to offer a summary of all relevant writing but to outline conceptual building-blocks for the following discussion of empirical developments in the EC ‘social dimension’. The same applies to the outline of the role of organised interests in the policy process. Section 1.2 studies the 1970s’ and 1980s’ debate on (neo-)corporatism which phased in the currently more fashionable discussion on policy networks. The latter approach includes basic insights from the corporatist literature but focuses on the meso-level which is more suitable for contemporary analysis, especially at the European level where policy-making is broken down in distinctive functional areas. Where existing models cannot provide a fully satisfying theoretical frame, I suggest innovative conceptualisations. For example, parsimonious idealtypes of policy networks are discussed, including issue networks (which are rather open and fluent), policy communities (which are rather closed and stable) and corporatist policy communities (which are, in addition to being closed and stable, characterised by state involvement in private interest organisation, by a delegation of public authority to private interests, and by de facto monopoly positions of crucial groups). On the basis of the conceptual tool-kit assembled in Chapter 1, the empirical parts of the book analyse EU social policy-making in depth. Chaper 2 focuses on relevant developments from the foundation of the European Economic Community up to the Intergovermental Conference preceding the Maastricht Treaty. First, substantive EU social policy is analysed with a view to the incremental exit from the ‘joint-decision trap’ (Scharpf), based on spill-over processes which changed the perception of the relevant policy-makers with a view to the usefulness of common social policy. Second, the EU ‘social dimension’ is looked at as a process of polity creation. Although one may speak of a corporatist ‘decision gap’ (Streeck) in the earlier periods of EC social integration, management and labour were incrementally pulled into the decision process.

Introduction

3

This is the relevant legal and political background of the actual social policy reforms under the Maastricht Treaty. Chaper 3 outlines the relevant innovations on the substantive as well as on the procedural level, including the controversial UK opt-out. A crucial question is why the Maastricht Social Agreement indeed happened: who pushed for the extension of competences and of majority voting? Who pushed for the establishment of a corporatist policy community, in the frame of the IGC? Chaper 4 covers the most recent past of EU social policy, i.e. the decision processes under the Maastricht Treaty’s innovative social policy regime. Case studies on the issues of European Works Councils, parental leave, and atypical work reveal that, against scholarly expectations, the corporatist policy community was indeed effective. To date, two major collective agreements signed between labour and management have formulated specific social minimum standards for the entire European Economic Area. The relevant procedures as well as the substantive contents are discussed to show the corporatist policy community ‘at work’. If we imagine a time axis running horizontally through the empirical field of EU social policy, the case studies represent a vertical perspective on it. Chaper 5, by contrast, takes a more longitudinal (or horizontal) perspective on the relevant developments. Each major interest group of the corporatist policy community and its environment is outlined, with a view to the development of its strategies vis-à-vis EU social standards and EU level collective negotiations. Quite obviously, the Maastricht innovations gave a considerable impetus for both intra-group reforms and the development of a negotiation culture between UNICE,3 CEEP4 and ETUC.5 Furthermore, the crucial issues of representativeness of the participating Euro-groups, of the role of the EC institutions in setting up the corporatist policy community, and of the incentive structure for all the relevant actors are discussed. Finally, the major insights of this study are outlined in a comprehensive manner. Chaper 6 draws lessons from the EU’s social dimension, first, for integration theory: both intergovernmentalism and neofunctionalism are partial approaches only, while the EU appears as a political system where ideas, interests as well as institutions are ‘alive and kicking’. Second, conclusions for approaches to public-private interaction in the policy process are formulated: what are the specific conditions that allowed for the development of a corporatist policy community? Last, but not least, the implications of the innovative post-Maastricht social policy regime for the future of Europe’s social dimension are discussed.

1

Political theory and EU politics

Both the development of EU social policy content and of the social policymaking process will be examined in the empirical parts of this study. Consequently, two strands of political science theory are employed to provide an adequate conceptual underpinning to this empirical research. In order to deepen our understanding of the development of integration in the social policy area, this chapter investigates promising political science approaches to regional integration. In order to analyse developments in the subfield of European integration which is of specific interest here, we need to take up and develop adequate conceptual tools at a more general level (see section 1.1). With a view to the second major interest of this study, i.e. to understand the EU social policy-making process and the role of the main actors therein, extant political science approaches referring to the role of interest groups in the policy process are reviewed (see section 1.2). 1.1 Concepts of the European integration process Theorising on European integration—the most far-reaching regional integration process among states—has an even longer history than the phenomenon itself (the Coal and Steel Community was founded in 1951). At the beginning of European integration, theory and practice were densely interwoven. This is true at the analytical as much as at the personal level: abstract thinking was often overtly normative, and the most prominent writers were leading actors of the integration movement or, subsequently, of the European institutions (e.g. Jean Monnet and Altiero Spinelli). The earliest approaches to what later developed into ‘integration theory’ are still of some significance today because later ‘grand theories’ included some of their central features. They are therefore briefly outlined here. Immediately after the Second World War, two approaches to the organisation of Europe which were, strictly speaking, more political than theoretical prevailed within the group of those who preferred a future 4

Political theory and EU politics

5

beyond the nation-state. While the federalists concentrated on prescribing a specific form of European polity (i.e. a federation), the functionalists focused on processes which were thought to facilitate political change. Central arguments of federalist thinking are the usefulness of a division of power between different levels of government, ideally based on a catalogue of competences for each layer. Altiero Spinelli, the outstanding figure in this tradition, aimed at a European state consisting of the old individual states which would cede their sovereignty to common democratic institutions (for details see e.g. Pistone 1996). Proponents of federalism typically drew on the experiences of national federations such as the United States of America, Canada or Switzerland. However, an obvious difference to the European condition was that none of these federations had initially involved fully-fledged states. Rather, they were founded by former colonies or by small cantons with a long tradition of confederation (e.g. Mutimer 1994:17). Important political events with a view to federalist thinking were the famous speeches of Winston Churchill who called for a union of Britain and France (1940) to form a ‘United States of Europe’ (Zurich speech 1946). Still during wartime, a congress of European federalists in Switzerland (organised among others by Altiero Spinelli) called for a post-war European federation. Unfulfilled hopes that the Council of Europe might bring about a European federal state, and the failure of the European Defence Community project in the French National Assembly in 1954 led to a split within the federalist movement following differences over both strategy and objectives (O’Neill 1996:24ff.; Mutimer 1994:16ff.). One group continued to call for a constituent assembly which should draft a constitution based on the will of the people, while the other realigned with the more pragmatic forces who were campaigning for the ‘Community method’ of kicking off European integration within single rather technical policy areas. The latter strategy was at the core of functionalist thinking (see e.g. Zellentin 1992). Functionalists focused on specific political and sociological dynamics which might facilitate regional integration between sovereign states rather than on any specific constitutional outcome of such longterm processes. To Jean Monnet, the French founding father of the European Communities, ‘the particular form that integration took was much less important than the requirement to launch the process on a practical footing, and thereby to give it a form that was capable of sustaining transnational cooperation against the opposition’ (O’Neill 1996:27). The most prominent functionalist writer, David Mitrany, envisaged ‘a technical administration of international society, organised into units based upon the provision of functions’ (Mutimer 1994:25). He sharply divided ‘the political’ and ‘the technical’ and is said to have been convinced that ‘politics was intrinsically evil’ (O’Neill 1996:32), regardless

6

EU Social Policy in the 1990s

of whether practised in nation-states or in regional federations. Consequently, criticism focused not only on the normative aspects of this approach (the same is true for ‘federalism’ as outlined above), but also on the technocratic assumption that politics and ‘technical problem-solving’ could ever be decoupled (see e.g. Haas 1964:23; 30ff; 93). Nevertheless, functionalism was taken as a starting point for one of the major theoretical approaches to European integration, i.e. neofunctionalism. Another important predecessor of neofunctionalism was transactionalism (also referred to as communications theory) whose proponents assumed that with a view to integration, a great deal of relevant change happens outside of organisations and formal decision-making. They considered anybody who does business or communicates as relevant to the creation of integrative or disintegrative trends: [C]ommunications theory suggests—it does not assert or prove—that an intensive pattern of communication between national units will result in a closer ‘community’ among the units if loads and capabilities remain in balance…. It does not explain when and how trust and responsiveness among actors, elites as well as masses, are to occur. (Haas 1971:22) Transactionalist empirical research focused on measuring communication on the basis of mail flows, telephone calls and tourism (see also Haas 1958:284 and footnotes 1 and 5). What ‘a federalist or neofunctionalist would consider as integration is conceived by Deutsch as fine tuning of an already integrated whole’ (Mutimer 1994:35). For R.van Wagenen and Karl W.Deutsch,6 integration had depended on the probability that conflicts will be resolved without violence. Their central concept of ‘security community’ referred to a group of people who have become ‘integrated’. This means that they have attained a ‘sense of community’, and ‘institutions and practices strong enough and widespread enough to assure, for a “long” time, dependable expectations of “peaceful change” among its population’ (quotations from Nelson and Stubb 1994:101; see also Haas 1964:27). People’s attitudes, notably those of the political elites, also played a great role in the first ‘grand political science theory’ on European integration, i.e. neofunctionalism. Some of the central features of neofunctionalist writing, notably the stress on the role of European institutions and the concept of ‘spill-over’, still play a role in contemporary analyses of the integration process. They also represent promising analytical lenses for understanding the development of EU social policy7 and will therefore be outlined in some detail below.

Political theory and EU politics

7

1.1.1 Neofunctionalism In his seminal book on the Coal and Steel Community, The Uniting of Europe (1958), the founding father of neofunctionalism, Ernst B.Haas, gave his much quoted definition of political integration as the process whereby political actors in several distinct national settings are persuaded to shift their loyalties, expectations and political activities towards a new centre, whose institutions possess or demand jurisdiction over the pre-existing national states. The end result of a process of political integration is a new political community, superimposed over the pre-existing ones. (Haas 1958:16) In opposition to earlier writing e.g. by Deutsch, Haas urged the distinction between situations prior to and during integration, and encouraged the study of the process of social change itself (Haas 1958:11; Haas 1964:29; for an overview of the debate see e.g. Lindberg 1963). Conceived not as a condition but as a process, the conceptualisation [of political integration] relies on the perception of interests and values by the actors participating in the process. Integration takes place when these perceptions fall into a certain pattern and fails to take place when they do not. (Haas 1958:11) Haas suggested investigating the process of integration by raising certain identical questions at regular intervals (ibid.: 15). The questions should not be submitted to the general public but to the political elites, i.e. ‘the leaders of all relevant political groups who habitually participate in the making of public decisions’ (ibid.: 17). Political party leaders, top civil servants, and particularly8 lobbyists were seen as the crucial political actors with a view to integration. During the 1960s, a second feature was added to the definition of the neofunctionalists’ main object of study: political integration is…the process whereby nations forgo the desire and ability to conduct foreign and key domestic policies independently of each other, seeking instead to make joint decisions or to delegate the decision-making to new central organs. (Lindberg 1963:103)

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EU Social Policy in the 1990s

The notion of integration henceforth consisted of two closely related parts, pointing to cognitive factors and patterns of elite behaviour in the widest sense, on the one hand, and to a mode of decision-making, on the other. Only in later neofunctionalist publications, a consensus seems to have emerged that integration should be perceived as increasing the range and importance of joint decisions and transferring greater powers and competence to common institutions (see Lindberg and Scheingold 1971; Mutimer 1994:31 with further references). Central to neofunctionalist reasoning is the ‘spill-over process’. This concept stems from the functionalist tradition but was also held by many economists and politicians (e.g. by the first Commission President Hallstein, see Schneider 1986:45ff.) at the time of Haas’ Uniting of Europe. In an early and simple formulation by Haas, spill-over refers to a situation where ‘policies made in carrying out an initial task and grant of power can be made real only if the task itself is expanded’ (Haas 1964:111). Thus, integration was perceived to have the potential to move on from one decision to another, from one sector to another, and even from less salient matters to issues which are traditionally perceived as touching the core of national sovereignty and identity (see O’Neill 1996:44ff.; Mutimer 1994:28ff.). Several variants of spill-over were developed over time. Most contemporary accounts of neofunctionalism (e.g. Tranholm-Mikkelsen 1991:4ff.; Lewis 1995:14; O’Neill 1996:43; Burley and Mattli 1993:55) present the following types (or a selection of them, see Haas 1958:313): • Functional spill-over: due to the interdependence between sectors or issues in modern economies it is impossible to treat them in isolation (action in one area begets action in another one); a classic example is the implementation of the common market necessitating accompanying measures (e.g. in social policy) which were not anticipated by the founding fathers of the EC. • Political spill-over: according to any author’s definition of ‘integration’ as such, this label referred to either shifts in political expectations and loyalties or to an increased decision capacity for the supranational level. • Geographical spill-over: ever more states want to join the integration area.9 • Cultivated spill-over: the EC institutions as ‘midwives for the integration process’ (Tranholm-Mikkelsen 1991:6) succeed in pushing for the upgrading of common interests instead of ‘splitting the difference’ or lowest common denominator bargaining. • Cultural spill-over: the expectations and loyalties of the elites shift towards the higher level political entity.

Political theory and EU politics

9

Over a long period the bifurcated perception of ‘integration’ seems to have led to a blurring of the related concepts of neofunctionalism, i.e. mainly the ‘spill-over process’. Some of the above-mentioned notions of spill-over which are still mentioned in contemporary integration literature seem to relate to older, hybrid definitions of integration. In an analytically sharp conceptualisation, both cultural and cultivated ‘spill-over’ should, however, be seen as factors that facilitate such a process rather than as spill-over proper.10 For example, Philippe C.Schmitter’s concept of spill-over is unequivocally based on an institutional understanding of ‘integration’: Spillover refers…to the process whereby members of an integration scheme—agreed on some collective goals for a variety of motives but unequally satisfied with their attainment of these goals—attempt to resolve their dissatisfaction either by resorting to collaboration in another, related sector (expanding the scope of the mutual commitment) or by intensifying their commitment to the original sector (increasing the level of mutual commitment) or both. (Schmitter 1969:162, emphasis in original) The level of commitment to joint policy-making included both continuity (the frequency of meetings and evaluation enterprises, etc.) and techniques (i.e. what we nowadays call supranationality of decision-modes, notably qualified majority voting [QMV]). Scope referred to the number of social groups or policy sectors involved and the importance of these policy sectors for the attainment of national actor-defined goals (two dimensions which were thought to be highly correlated). If we include what Schmitter called an ‘externalisation hypothesis’ (ibid.: 165; i.e. geographical spill-over), there are three possible dimensions of spill-over: scope, level, and area of commitment (see Table 1.1). Table 1.1 Dimensions of spill-over

Note: Extending the logic of Schmitter 1969

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EU Social Policy in the 1990s

According to Schmitter, contributing to the expansiveness of this spillover process were, first, the underlying interdependence of functional tasks and issue areas, and, second, ‘the creative talents of political elites, especially the administrators of regional institutions, who seize upon frustrations and crises in order to redefine and expand central organizational tasks’ (Schmitter 1969:162). This conception seems preferable to others because it properly distinguishes between facilitating conditions and forces working in favour of spill-over, on the one hand, and the very dimensions or forms of this phenomenon, on the other. In later publications, Schmitter elaborated a ‘revised theory of integration’ including a refined model where spill-over indicated an increase in both scope and level of commitment (see ibid.: 40).11 By contrast, spill-around referred to an increase only in scope; build-up to an increase in level but not in issue areas; muddle-about to an increase in scope but not in level; spill-back to a retreat on both dimensions; and encapsulation referred to only some marginal or no modifications as response to a crisis. Yet, the increased terminological complexity does not seem to offer much analytical surplus. The notions of ‘spill-back’ (see Lindberg and Scheingold 1970) and ‘encapsulation’ are certainly useful (and have meanwhile become standard vocabulary in integration studies). But instead of using the complex further categories, I prefer to use ‘spill-over’ as encompassing both functional, political, and geographical subtypes—according to Schmitter’s earlier concept. The same should apply to the notion of ‘spill-back’: functional spill-back refers to a decrease in the issue areas covered by EU level decisionmaking; ‘political spill-back’ to a decrease in the level of commitment (less ‘supranational’ in the sense of less frequent or more unanimous decisionmaking); and ‘geographical spill-back’ would refer to the exit of a member state (or an area like Greenland). The older terminology is better suited for the study of individual decision processes, such as in the following chapters of this book. By contrast, Schmitter himself wanted to ‘specify and predict the conditions under which the consequences generated by prior joint decisions will lead to re-definitions of actor strategies vis-à-vis the scope and level of regional decision-making’ (Schmitter 1969:40). This means that he was rather interested in the macro level of integration, i.e. the aggregation of all issue areas/decisions (which is beyond the scope of this study). In any case, the neofunctionalists saw an integrative logic at work. Whether this was a necessary logic, i.e. one enrolling in an automatic way, was not central in Haas’ two pathbreaking books.12 The reproach of believing in an automatism was nevertheless a central one against neofunctionalism, although e.g. Leon Lindberg had explicitly stated three critical preconditions for a successful intensification of regional integration via spill-over (Lindberg 1963:104).13

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• First, the development of central institutions and central policies (whose role, definition and de facto use of the competences granted mattered). • Second, the quality of the tasks assigned to these institutions (they need to be both important and specific enough to activate socio-economic processes to which conventional international organisations have no access). • Third, the perception of the member states that their interests are consistent with the enterprise: ‘it must be stressed that little could be done to move beyond minimal obligations if one or several states were to maintain a determined resistance’ (Lindberg 1963:108). Among the other reasons for the decline of neofunctionalism as the leading integration theory seems to have been the high quantity of ‘neofunctionalist’ writing in combination with the significant internal discrepancies within this school: [I]t should be noted that neofunctionalism has come to mean different things to different people. This stems from neofunctionalists increasingly ad hoc reformulations, internal disagreements, and very selective and narrow interpretations by their successors. Indeed, neofunctionalism is often portrayed as a sort-of ‘straw-man’ and dismissed on the presumed tenacity of the European nation-state to survive. (Lewis 1995:8) An obvious failure was the extremely complicated formalised measurements and models of integration in late neofunctionalism (see e.g. the contributions to Lindberg and Scheingold 1971). They were partly even thought to be of general applicability in all geographic areas experiencing regional integration all over the world. The modelling resulted in ever more detailed catalogues of ‘mechanisms and integrative conditions’ (e.g. Nye 1971:217). It was a major reason for the declaration of the ‘obsolescence of regional integration theory’ (Haas) that the neofunctionalists could nevertheless not reach their goal of predicting the policies adopted (see especially Schmitter 1970; Lindberg 1971). Beyond this aspect, criticism of neofunctionalism as found in contemporary writing focuses on: • the reproach of ‘automatism’ as the seemingly still most frequent critique (see e.g. Groom 1994:117; see also Moravcsik 1993:476ff.); • the lack of a clearly conceptualised endpoint of integration (see e.g. Haas 1971:30) although there was a focus on the question of a possible final stage, at least in some neofunctionalist writings;

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• differing definitions of integration (at least for a long time; see above); • an apolitical understanding of politics (Groom 1994:116ff.) regarding the failure to specify the causal relationships between economic and political integration (see Lewis 1995:13) and between social values and political behaviour (O’Neill 1996:43); in the words of Caporaso and Keeler (1995:36), a profound shortcoming of neofunctionalism was that it provided neither a theory of bargaining nor a theory of political choice. Exactly the latter focuses (bargaining and preference formation) are at the centre of the intergovernmentalist thinking which succeeded neofunctionalism as the dominant school of integration theory in the 1970s. 1.1.2 Intergovernmentalism This ‘state-centric’ concept of regional integration theory builds on realism which has been the dominating international relations approach since the Second World War. In this perspective, states defend their national interests against each other like hard ‘billiard balls’. They are the pivotal and solely dominant actors of international affairs, an area which is perceived to be characterised by power politics. The EU is not seen as substantially different from other international organisations. The latter are, in general, considered to serve the interests of states without challenging their sovereignty. Extreme realists like Stanley Hoffmann (1966) went as far as completely dismissing the neofunctionalist notion of spill-over as an unproved deduction and a misleading metaphysic, an act of faith (see O’Neill 1996:61). At the very best, a kind of managerial politics might be susceptible to functionalism, while ‘high politics’, i.e. the areas of core national interest such as foreign policy, were strictly delineated.14 In any case, Hoffmann rejected any integrative dynamic that might have changed the traditional ‘game’ of international politics and eroded national sovereignty in favour of European integration: the nation-state, preserved as the basic unit, survives transformed. Among the men who see in ‘national sovereignty’ the Nemesis of mankind, those who put their hopes in the development of regional superstates are illogical, those who put their hopes in the establishment of a world state are Utopian, those who put their hopes in the growth of functional political communities more inclusive than the nationalstate are too optimistic. (Hoffmann 1966:224) One of the most common criticisms of the traditional version of realism was the image of ‘national interests’ as structurally derived from a state’s

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position in the international power distribution (see Caporaso and Keeler 1995:44). This was changed in several contemporary state-centric approaches to European integration, such as those of Fritz Scharpf and Andrew Moravcsik. Fritz Scharpf is one of the authors who drew important insights on EC politics from the ‘federal analogy’, i.e. comparing the EC to federal states (see also Sbragia 1994; 1993). He argues that the ‘joint-decision trap’ is a structural similarity between Germany and the EC. This notion was developed with a view to the institutional setting of federal-Länder relations in West Germany. In his seminal 1988 paper (German original: 1985), Scharpf ascribed what he called ‘the paradox of European integration—frustration without disintegration and resilience without progress’ (Scharpf 1988:242) to similar decision patterns at the EC level. In both the German and the EC political systems, the powers of the central government are limited. The constituent governments not only continue to exercise original governing powers at the lower tier, but their consent is needed even for federal legislation. It is thus the interlocking of competences, not a division of competences, which is characteristic of such systems of ‘co-operative federalism’. This is different in the United States where the exercise of federal government functions is formally independent of the governments of the American states. For Scharpf, there are two institutional reasons for the ‘pathology of interlocking politics’ (ibid.: 254). First, national governments are making European decisions, hence the institutional self-interests of the lower level governments to preserve their sovereignty are not filtered by a representation principle.15 Second, these decisions have to be unanimous or nearly unanimous (ibid.: 254).16 Because of these conditions, Scharpf perceives two mechanisms as hindering progress in European integration such as predicted by the neofunctionalist spill-over hypothesis: the political priority of substantive compromises over institutional reform, and the institutional self-interest of the member governments in the preservation of their veto position (ibid.: 267).17 But beyond sub-optimal policy outputs, joint-decision systems are, according to Scharpf, a ‘trap’ in an even more important sense because they block their own further institutional evolution (ibid.: 267)—a possibility which Scharpf states has been overlooked by the functionalists and neofunctionalists. In the absence of a European government with a popular political base of its own, all possibilities of institutional transformation are entirely determined by the self-interests of national governments. And even those among them which most vigorously support activist and expansionary European policies are likely to hedge their bets when it comes to relinquishing their veto powers. (Scharpf 1988:267ff.)

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For Scharpf, the actors in a ‘joint-decision trap’ are likely to be confronted with tensions between a recognised common interest and the individual self-interest of the participants. At the same time, they ‘all should have difficulties in adopting a decision rule [majority or hierarchy] that could avoid reversion to the bargaining style at the expense of membership control over the substance of decisions’ (ibid.: 273). By way of conclusion, Scharpf states that the ‘joint-decision trap’ is an institutional arrangement whose policy outcomes have an inherent tendency to be sub-optimal, but which nevertheless represents a local optimum in the cost-benefit calculations of all participants that might have the power to change it. If that is so, there is no ‘gradualist’ way in which joint-decision systems might transform themselves into an institutional arrangement of greater policy potential. In order to be effective, institutional change would have to be large-scale, implying the acceptance of short-term losses for many, or all, participants. That is unlikely, but not impossible. (ibid.: 271) In conceptual terms, Scharpf’s concept of the joint-decision trap directly opposes one facet of the neofunctionalist concept of spill-over. As outlined above, authors such as Philippe Schmitter expected spill-over to happen if the EC governments attempt to resolve their dissatisfaction with the outcome of initially agreed joint policies not only by expanding the scope of the mutual commitment but also by intensifying their commitment (i.e. by increasing the level of mutual commitment; see Schmitter 1969:162). The latter, i.e. political spill-over, is at odds with Scharpf’s joint-decision trap. Political spill-over in the sense of an increased commitment to joint policy-making which is expressed by majority voting may be seen to represent an exit from the constellation described by Scharpf (which was deemed highly implausible if not impossible). This study will actually analyse political spill-over in EU social policy. The most controversial among the state-centric approaches to European integration is nowadays Andrew Moravcsik’s liberal intergovernmentalism. This approach consists of two components: ‘a liberal theory of how economic interdependence influences national interests, and an intergovernmentalist theory of international negotiation’ (Moravcsik 1993:474). The EC is studied as an ‘international regime for policy co-ordination, the substantive and institutional development of which may be explained through the sequential analysis of national preference formation and intergovernmental strategic interaction’ (ibid.: 480). It is assumed that states behave ‘rationally’ in the sense that their preferences are determined by the costs and benefits of economic interdependence. Following liberal theories of international

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relations, national interests in international negotiations result from domestic politics and vary according to ‘shifting pressure from domestic social groups, whose preferences are aggregated through political institutions’ (ibid.: 481). International co-operation is consequently a two-step process: the domestic preference formation process precedes interstate strategic interaction between self-interested states. In the centre of (liberal) intergovernmentalist attention are the ‘grand bargains’ on quasi-constitutional reforms of the EU treaties. Generally, this approach stresses that ‘fundamental decisions in the EC can be viewed as taking place in a non-coercive unanimity voting system’ (Moravcsik 1993:498). For intergovernmentalists, the institutional structure of the EU ‘is acceptable to national governments only insofar as it strengthens, rather than weakens, their control over domestic affairs, permitting them to attain goals otherwise unachievable’ (Moravcsik 1993:507; Moravcsik 1994; see also Milward 1992). 1.1.3 A ‘syncretic’ approach: interlocking politics Leon Lindberg (1963:102) had already pointed to the fact that collective decision-making procedures involving a significant amount of political integration can be achieved without moving towards a superimposed political community as originally expected by Haas. It is therefore a crude— but nevertheless common—shorthand that neofunctionalism anticipates the creation of a supranational political system replacing the state while intergovernmentalism expects the continued strength of the nation-states as the sole pivotal actors in the international system.18 During the late 1970s it became clear the Community did indeed represent a ‘halfway house’ (this expression was coined by Haas 1976:203; see e.g. W.Wallace 1977:321). Soon, a new generation of integration researchers argued against Haas’ prediction that the Community might not continue in such a state of messy equilibrium (see Haas 1976; Caporaso and Keeler 1995:39ff.; the same was assumed by Hoffmann 1966:224). What O’Neill (1996:81) calls the ‘syncretic paradigm’ of European integration thus started from the assumption that the states were not withering away nor were they still the sole relevant actors at the European level. A variety of writers tried to incorporate assumptions from both of the neofunctionalist and the state-centric ‘grand theories’. ‘Instead of the certainties of both process and outcome that tend to characterise the classical paradigms, [the syncretic paradigm]…replaces certitude with paradox’ (O’Neill 1996:81). During the late 1970s and the 1980s, a great deal of research on European integration in fact focused on detailed case and area studies (see the famous

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book on EC policy-making edited by Wallace et al. 1977). In the words of a contemporary: ‘As the pace of European integration slowed…, so the production and development of integration theories also slackened. Attention has been diverted to examining Community policy-making, particularly through case study analyses’ (Bulmer 1983:349).19 Caporaso and Keeler highlight that the scholarship of the ‘doldrums era’ (1995:36) of European integration merits more attention and respect than it has been accorded. It is true that a good deal of this work was self-consciously atheoretical and indeed sometimes mocked Haas-style efforts at grand theory with alleged predictive capacity. However, it is also true that the best ‘Dark Age’ research presented cogent theoretical insights or produced ‘microlevel case studies’ that implicitly made significant contributions to the enterprise of theory building. (ibid.: 39) In the early 1990s, some scholars again dared to present elaborate approaches to account for the process of European integration, in general. While Andrew Moravcsik revived the state-centric paradigm (or ‘intergovernmentalism’), other scholars incorporated a few selected aspects of the supranational approach into what might be termed an approach of ‘interlocking politics’. Although deliberately not placing themselves within the neofunctionalist ‘school’, authors like Wolfgang Wessels,20 Gary Marks and Lisbet Hooghe view the EU as a polity-creating process, and thus as an (at least: emerging) political system (see Lindberg 1967). While they acknowledge that there are integrative dynamics at work, they do not expect an outright transcendation of the state: ‘One does not have to argue that states are on the verge of political extinction to believe that their control of those living in their territories has significantly weakened’ (Marks et al. 1996:371; see Wessels 1997:274ff.). The perspective on the European Communities as ‘a multilevelled system arranged in political layers from the local to the supranational’ (see W.Wallace 1977:316) which includes the nation-state in a wider political structure instead of replacing it (at least in the short run) is typical of the ‘syncretic approach’ to European integration. Within the ‘interlocking politics approach’, however, there is a particular focus on the co-operation of politicians and bureaucrats from the various levels, notably on the participation of the national (and more recently also subnational) executives in EU policy-making. Probably the most coherent formulation of this approach is by Wolfgang Wessels (see particularly Wessels 1997). His ‘fusion model’ starts from the assumption that ‘[w]ith rising expectations, the modern West European states are made more and more responsible for a performance that is less and less

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within the reach of their autonomous actions’ (Wessels 1991:136; see Wessels 1992:40).21 Therefore, the states undertake a (selective) fusion of their action potentials, ‘a “merger” of public resources located at several “state-levels”’ (Wessels 1997:274). The long-term growth trend in European integration is thus basically ‘explained by the rational choice of national governments and administrations’ as ‘the major characteristic and driving force’ (ibid.: 273 and 274). What results is more than a pooling of national sovereignties because the horizontal and vertical differentiation, as well as the dynamics of the decision process and the interaction style, notably of the Council, make it more appropriate to characterize this evolution as an ‘amalgamation’ of the national system into a new common system with its own competencies, institutions, and procedures. The central features of this process lead neither to a federation in the traditional notion nor to an extensive use of intergovernmentalism. The mixture of the two systems…is close to what is known as cooperative federalism. (Wessels 1991:149) Nevertheless, Wessels does not expect the states to disappear within the new common system. Rather, his concept of a ‘fusionierter Föderalstaat’ (Wessels 1992:41) points to the continued tension between the two levels. In explicit opposition to Andrew Moravcsik’s intergovernmentalism, a group of scholars has recently formed a school of thought on European integration under the label of ‘multi-level governance’, building on earlier work notably by Wessels (see Marks et al. 1996:346). This group started from the analysis of EC structural policy which accounts for their emphasis on subnational governments being a critical element of EU politics (e.g. Marks 1992:222). By arguing that European integration is a polity-creating process which has made control slip away from national governments, Marks et al. (1996) might go a little bit further towards a neofunctionalist focus on supranational dynamics if compared to Wessels. They, too, see that decisionmaking competences are shared by actors at different levels: ‘Instead of conceiving of the state as a unitary actor, the multi-level governance approach disaggregates the state, and examines the decision making of particular state actors, including, of course, member state executives’ (Marks 1996:418). Quite contrary to Moravcsik’s hypotheses, the state in their view no longer monopolises the aggregation of domestic interests. EC institutions, especially the Commission, are seen in direct contact with non-central government actors, particularly regional and local authorities.22 Regional authorities are seen as important additional channels to tie newly mobilised interests to Europe—thereby complementing the aggregating role of member states: ‘Actors are linked through networks, which span several levels and in which

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each actor brings in valuable resources’ (Hooghe 1995:5). Again in opposition to Moravcsik, the multi-level governance approach attributes to the European institutions, especially the Commission, autonomous potential for influence (on the role of institutions see also below). Government leaders are seen to shift decision-making to the supranational level because, for instance, substantive policy gains may be more important than state sovereignty to the acting politicians who have a short time horizon, and because government leaders may want to avoid responsibility for certain policies, or to insulate them from political pressures (Marks et al. 1996:349). In short, states may be weakened if government elites seek to achieve their own policy goals. In addition, Marks, Hooghe and Blank see limits on collective state executive control: governments are for practical reasons less dominant in day-to-day EC policy-making than in Treaty revisions and major legislation; control over supranational agents is constrained by factors such as the multiplicity of principals, information asymmetries and unintended consequences of institutional change (1996:352). This does not lead to an explicit challenge to the sovereignty of states, but to their ‘being melded gently into a multi-level polity by their leaders and the actions of numerous subnational and supranational actors’ (Marks et al. 1996:371). Just like Wessels, they perceive the polity which results at any particular point in time not as a stable equilibrium, but rather as the outcome of an ongoing tension between supranational and intergovernmental pressures. In the words of Lisbet Hooghe (1995:3) ‘there is no centre of accumulated authority but…changing combinations of supranational, national and subnational governments engage in collaboration’. 1.1.4 The status quo of ‘grand theorising’ on European integration Whereas natural scientists discuss results, social scientists argue about their concepts. (J.A.Hall 1993:31)

Table 1.2 shows that different actors and different forms/levels of activity are focused on by each of the outlined schools of thought on European integration. While clashes between intergovernmentalists and neofunctionalists were day-to-day business in earlier phases of European studies, the very recent past has seen an increased pragmatism. It constitutes without doubt progress to move beyond the ‘black-and-white painting’ of either ‘governments matter’ or ‘supranational institutions and pressure groups matter’. Amongst others, Sandholtz has suggested that ‘[p]erhaps our explanatory goals are best served by specifying the analytical strengths—

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Table 1.2 Schools of integration theory

and limitations—of approaches that work better in combination than alone’ (1993:39), and that ‘[d]ifferent kinds of theory will be suitable for different aspects of the EU’ (Sandholtz 1996:405). Peterson (1995a) has presented a model where the single approaches are connected to specific phases of the EC policy process. We are thus witnessing an increasingly peaceful coexistence of different analytical focuses in integration theory. But the reverse of this coin is that only a few contemporary authors aim at a synoptical view of the integration process. Richardson seems to have expressed the mainstream feeling when he stated that ‘grand theory must await a much stronger empirical basis’ (Richardson 1995:4). The contemporary danger, however, is an eclectic use of models according to their ‘best fit’ with the specific empirical material at the micro level of single case studies. Analysts tend to adopt the functional perspective when integration and institutionalization are proceeding without significant member state interference and to utilize intergovernmentalism either when major new debates or initiatives emerge or when acrimony among member states is obstructive to the integration effort. (Rhodes and Mazey 1995:9) In its extreme form, this tendency has led different authors to highlight different actors as central in case studies on the same issues. Studies on the Internal Market Programme are a case in point (see also Caporaso and Keeler 1995; Schmitter 1996a; Wallace and Young 1996). Moravcsik (1991) sees intergovernmental bargaining based on nationally defined preferences, i.e. the search for the lowest common denominator.

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Sandholtz and Zysman (1989) mainly stress pressures and changes of the international economy as well as the role of the Commission, in addition to successful lobbying. The latter is central in Maria Green Cowles’ work (1995): she argues that the European Round Table of Industrialists shaped the options before the governments came to the negotiation table. Garrett, in turn, agrees with Sandholtz and Zysman that ‘[i]t would be wrong…to characterize the institutions supporting the internal market as just the apolitical providers of information’ (Garrett 1992:535). But he emphasises that ‘both the economic rules and the political institutions governing the internal market reflect the preferences of the most powerful countries in the EC’ (Garrett 1992:559) and suggests that further integration of the EC will ‘similarly be affected by power politics’ (ibid.: 560). Having studied these—and other—papers on the Internal Market Programme regarding the ‘1992’ programme, one ends up with a list of actors and dynamics, each of which are thought to be central in differing accounts. This is because often the interplay of different forces over time and the procedural level as such receive too little attention. Some arguments which characterise the most recent debates on European integration have at least the potential to transcend the present state of affairs in ‘grand theorising’. They stem from insights generated outside the realms of ‘integration theory’, in the political science fields of international relations (IR), policy analysis, and comparative politics.23 It is the role of the EC institutions and the role of the cognitive level (including ideas and the process of preference formation) which have re-entered the arena. These aspects seem to offer great potential for this study of EU social policy (and will therefore be outlined below) although they cannot—at least not yet—offer a full causal explanation of the process of European integration (such as the ‘grand theories’ claim). 1.1.5 ‘New institutionalism’ and European integration During the 1980s, a focus on institutions reappeared in political science. While the study of political institutions dates back to writers such as Max Weber and even Montesquieu, the new approach was described as ‘blending elements of an old institutionalism into the non-institutionalist styles of recent theories of politics’ (March and Olsen 1989:2). Earlier generations of studies on institutions had focused on the legal and administrative structures of formal institutions. They were succeeded by the behaviouralists during the 1950s and 1960s who questioned whether formal structures of either institutionalism or Marxism could explain actual policy outcomes. By contrast, they focused on observable behaviour of individuals and groups. The increased stress on intermediate-level institutions such as

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interest groups during the 1970s may be described as new institutionalist, but the ‘self-conscious definition and application’ is said to only have happened in the 1980s (see Thelen and Steinmo 1992:6 with further references).24 New institutionalism in political science was influenced by institutionalism in sociology during the late 1970s whose basic claim was that the individual as an autonomous social actor is a product, not a producer, of society and culture (Finnemore 1996:333). Going beyond the traditional meaning of political institutions, the new political science approach has a wider understanding of the term institution, pointing also to patterns of behaviour, to structures of economic distribution (markets), and to organisational networks (see e.g. Döhler 1991:236 and R.A.W.Rhodes 1995:53ff., both with further references). In any case, institutions are seen as intervening variables between the preferences and power of the governments and the policy outputs of EC governance (Pollack 1996:431). Meanwhile, ‘new institutionalism’ comprises (at least)25 two distinct traditions. Rational choice scholars see institutions as important features of the strategic context of rational actors who pursue their self-interest. By contrast, ‘historical institutionalist’ writers depart from such strict rationality assumptions and argue that ‘most of us, most of the time, follow societally defined rules, even when so doing may not be directly in our self-interest’ (Thelen and Steinmo 1992:8). Consequently, a strong focus is on preference formation: historical institutionalists argue that even the goals (not only the strategies) pursued by actors are shaped by their institutional context: ‘Bureaucratic agencies, legislative committees, and appellate courts are arenas for contending social forces, but they are also collections of standard operating procedures and structures that define and defend values, norms, interests, identities, and beliefs’ (March and Olsen 1989:17).26 Thus, specific outcomes cannot be understood in terms of the preferences and capabilities of the actors alone because the very nature of these actors (i.e. their capabilities and preferences) can only be understood as part of some larger institutional framework (see Krasner 1988:72). This approach is informed by sociological insights pointing to the derivative character of individuals who are sensitive to consensual norms which are internalised through socialisation. Furthermore, the specific options available for political actors at any point of time are constrained by available institutional capabilities. Only the latter point would be accepted by rational choice theorists. ‘Historical institutionalism’ perceives of institutions as ‘the formal rules, compliance procedures, and standard operating practices that structure the relationship between individuals in various units of the polity and the economy’ (Hall 1986:19, quoted in Thelen and Steinmo 1992:2). The exact range of included phenomena is, however, a matter of disagreement. Some authors include not only specific characteristics of government institutions

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and more overarching structures of state, but even a polity’s normative social order (see Thelen and Steinmo 1992:2 with further references). The latter aspect of normative social order, including norms and class structure, is, however, excluded from the realm of ‘institutions’ by most writers in order to allow for a distinction from ‘ideas’ (see below). In short, the mainstream of new historical institutionalism focuses ‘on the way institutions shape the goals political actors pursue and the way they structure power relations among them, privileging some and putting others at a disadvantage’ (Thelen and Steinmo 1992:2) (see Table 1.3). With a view to integration theory, it was often in explicit opposition to Andrew Moravcsik’s liberal intergovernmentalism that scholars have recently stressed the role of supranational institutions, especially in day-today EC policy-making, as an important focus for a better understanding of the process of European integration. Table 1.3 Subtypes of ‘institutionalism’*

Note: *After Thelen and Steinmo 1992

Whether it is the old or the new form, whether sophisticated mathematical calculations are present or absent, the problem with intergovernmentalism is not cosmetic but congenital. National governments are not the only important decision makers in the EU. The Commission of the European Communities and the European Parliament also play important legislative roles. It is only by analyzing the effects of institutional rules on the interactions among these institutions that one can understand the policies that are produced every day in the EU and hence the nature of the integration process itself. (Garrett and Tsebelis 1996:294) When Simon Bulmer and others reminded the international mainstream27 of the discipline of the historical institutionalist insight that institutions

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should be recognised to be more than arenas within which political action is played out (Bulmer 1994:357; see also Schneider et al. 1994:475), this aspect moved frontstage in EU research. Clearly, this strand of ‘new institutionalism’ is—at least so far—less theory or method than discussion topic (R.A.W.Rhodes 1995:54). Even if a set of causal assumptions which make up a model of the integration process has not been accomplished, the renewed focus on the EC institutions’ active role in the integration process has revealed weaknesses of the prominent intergovernmentalist approach. Therefore, some see at least the potential for model-building along these lines (e.g. Peterson 1995b: 400ff.). To date, a consistent body of causal ‘neo-institutionalist’ hypotheses on the process of European integration and, in particular, on the relationship between political entrepreneurship by the EC institutions and governmental influence within the EC policy process has not been presented. Most recently, however, systematic inventories of how the Commission, the European Parliament (EP), the European Court of Justice (ECJ) etc. can ‘take a life of their own’ (Pollack 1996:429) have been presented. Wayne Sandholtz suggests that the EU institutions can affect political behaviour and outcomes in three broad ways: by becoming autonomous political actors; by creating options for domestic actors in their choice of allies and arenas; by inducing changes in domestic policies and institutions (Sandholtz 1996:403). Paul Pierson seeks to persuasively account for member state constraints in the integration process, in what he calls a historical institutionalist viewpoint.28 Although he accepts that the member states play a central role in policy development within the EU, they are seen to be embedded ‘in a dense institutional environment that cannot be understood in the language of interstate bargaining’ (Pierson 1996:159). As sources of gaps in member state control he points to an at least partial autonomy of EC institutions, to the restricted time horizons of political decision-makers, to unanticipated consequences of decisions, to shifts in the preferences of political leaders, to possible resistance of supranational actors, to institutional barriers to reform (difficulty of Treaty reform, unanimity requirements), and to ‘sunk costs’ (social adaptation to EC institutions and policies makes policy reversal costly and unattractive). Mark Pollack (1996), in turn, considers himself a representative of the rational choice brand of ‘new institutionalism’. He perceives the EC institutions as serving as an intervening variable between the power and (pre-set) ‘preferences of EC member governments, on the one hand, and subsequent choices about both institutional change and policymaking on the other’ (Pollack 1996:430). He suggests that institutions matter in so far as they lend stability to an existing institutional structure; as they shape any subsequent amendment of those institutions; as they allow individual member governments to be outvoted by qualified majority; cause member

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states to lose control of events through lock-ins (if e.g. due to unanimity requirements policy cannot be changed despite a changed environment); and as they subject member governments to the actions of supranational agents whose behaviour they can control only imperfectly. However, a renewed interest (see Haas e.g. 1964:111) in activism by the EC institutions and in constraints on governments created by them is just one aspect of recent academic attention (and in fact, a more ‘old institutional’ one in the sense of Thelen and Steinmo;29 see Table 1.3). Even more fundamental is the discussion of the effect of Euro-level co-operation between various actors on the process of preference formation, and on the role of ideas (here we turn to institutions in a purely informal, non-material sense; see Matlary 1997:205).30 A liaison between the institutional and the ideational discussions is outlined by Garrett and Weingast who explicitly related the activist role of the EU institutions to the realm of ‘ideas’ in the wider sense. Institutions ‘not only provide individuals with critical information about defection but also help construct a shared belief system that defines for the community what actions constitute cooperation and defection’ (Garrett and Weingast 1993:176, emphasis added). On a more practical level, institutions co-ordinate expectations and provide ‘constructed focal points’ ‘by embodying, selecting and publicizing particular paths on which all actors are able to coordinate’ (Garrett and Weingast 1993:176). This may certainly impinge on the process of preference formation. 1.1.6 Preference formation and EU politics Once again, Moravcsik’s ‘liberal intergovernmentalism’ created friction when very recent research31 on European integration took a closer look at how and where preferences are formed. The perception that member state interests are shaped in part by membership of the EU is directly opposed to Moravcsik’s ‘liberal’ assumption that interests exclusively emerge from national politics (shaped by societal forces) and that at the EU level only bargaining on pre-set national preferences takes place.32 It seems that Keohane and Hoffmann were the first among recent scholars pointing in the direction of Euro-level preference formation of governments. In their study on the Internal Market Programme, Keohane and Hoffmann argued that the existence of the EC as a regime ‘though it did not provoke the new definition of French and British interests, affected these states’ calculations of incentives and made it possible for them to see a policy of relaunching Europe as advantageous’ (1990:25). Wayne Sandholtz went further when he set out to explain why national leaders chose to bargain on monetary union in the 1990–91 IGC. He found that ‘efforts to formulate a single unified theory of state preferences—which must

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precede analytically any theory of bargaining—face formidable obstacles’ (Sandholtz 1993:2). He argued unequivocally that although national politics do matter (his explanation in fact includes a series of propositions which ‘only together are sufficient to explain’, ibid.: 39), national preferences33 are not always to be taken as given but may be endogenous to EC level politics: ‘national interests…are not formed in a vacuum and then brought to Brussels. Those interests are defined and redefined in an international and institutional context that includes the EC’ (Sandholtz 1993:3). Even in the controversial domain of European Political Co-operation (the precursor of the Common Foreign and Security Policy), the supposedly weak institutions were seen to influence the preferences and interests of their member states. Michael E.Smith observed the quiet development of a transgovernmental policy network which allows for the communication between lower-level officials which ‘eroded the monopoly on foreign policy held by chiefs of government and foreign ministers…[T]his institutionalized information-sharing was specifically directed towards identifying and developing common interests, and changing state preferences, rather than for trading favours’ (Smith 1996:45; see also Tonra 1997; Jørgensen 1997c). Referring to the terminology of Rein and Schön (1991), the ‘framing’ of policy problems, i.e. the formation of underlying structures of belief, perception, and appreciation, has been suggested to even represent ‘the most crucial phase of EU policy-making’ (Mazey and Richardson 1996:9). Policy frames ‘can become powerful instruments both for influencing the preference formation processes of all actors and for constraining subsequent debates on specific policy proposals’ (ibid., emphasis added; see also Kohler-Koch 1996a:372). In the area of EU steel policy, Dudley and Richardson (1997) analyse how the free market idea as a policy frame ‘infiltrate[d] an apparently stable sector with well established institutional structures and values’ and finally became dominant (ibid.: 12). John Gerard Ruggie perceives of the EC as a ‘multiperspectival polity’ where not only preferences, but even identities are being shaped:34 [T]he collectivity of members as a singularity, in addition to the central institutional apparatus of the EC, has become party to the strategic interaction game…the constitutive processes whereby each of the twelve defines its own identity—and identities are logically prior to preferences— increasingly endogenize the existence of the other eleven. (Ruggie 1993:172) A similar approach was suggested by Schneider et al. (1994:475) who discovered the EC ‘as a single corporate actor with autonomous action capacities that go beyond their Member States’ interests’ (emphasis added), in

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telecommunications policy. Ruggie’s ‘lucid if brief conceptualisation’ (Lewis 1995:2) was further developed by Jeffrey Lewis who suggests applying to the process of European integration the (in his terminology) constructivist view that identities and interests should be treated as dependent variables endogenous to interaction.35 [T]he interaction context of the EU is sui generis because of the way in which the units [member states] are organized and related to each other and embedded within a broader collective decision-making system which taken together constitutes a ‘collectivity acting as a singularity’. (Lewis 1995:6) The recognition of the unique interaction context of the ‘collectivity as a singularity’ leads Lewis to the same insight as various above-mentioned authors: ‘the constitutive processes of national preference formation are endogenous to the strategic interaction context of the EU’, while ‘national, supranational, transnational, and subnational identities prestructure the context in which, “national” preferences are formed’ (Lewis 1995:3 and 2). Helen Wallace mentions ‘shared identities being built around shared policy regimes’ (1996:20). In different words, Alberta Sbragia pointed in the same direction. In her piece ‘From “Nation-State” to “Member State”’, she observes a ‘gradual blurring of the distinction made between “the Community” and the “nation-states”… The gradual embrace of the two has happened slowly and incrementally’ (Sbragia 1994:70). She describes a ‘gradual knitting together’ (ibid.) of elites, policy and politics. In this process, ‘socializing new actors is…a central component’ (ibid.: 75; on the role of socialisation at the EC level see also Jørgensen 1997c:175 with further references).36 If identity and preference formation processes take place at the European level, ideational factors move to the centre of attention. It is thus hardly surprising that they represent a third ‘new’ topic within recent European integration research. 1.1.7 The role of ideas and communicative action Thomas Risse-Kappen reproaches neofunctionalism as well as intergovernmentalism for neglecting the role of cognitive factors in analysing integration (Risse-Kappen 1995:3). Pointing to the ‘constructivist turn’ in international relations theory, he suggests that transnational relations should be assumed not (only) to be held together by instrumentally defined selfinterests, but by collectively held values and consensual knowledge. Here, ideas (understood as beliefs held by individuals; see Goldstein and Keohane

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1993b:3) have an important role to play. The revival (see already Haas e.g. 1964:29, 113; 1971:39; Lindberg 1971:99ff.) of interest in cognitive factors37 has also taken place at the stage of EU studies. Geoffrey Garrett and Barry Weingast found that to understand the evolution of the EC Internal Market Programme, it is necessary to integrate interests and ideas. Our argument is that a cooperative agreement to complete the single market in Europe based solely on decentralized, self-interested behaviour neither could have emerged in the mid-1980s nor would be likely to sustain itself after 1992. (1993:177; emphasis added) However, they claim that ‘[i]t is not something intrinsic to ideas that gives them their power, but their utility in helping actors achieve their desired ends under prevailing constraints’ (ibid.: 178).38 It seems that with a view to the EU’s ‘social dimension’, a similar approach could be revealing. On a more general level, it was Giandomenico Majone who recently drew attention to the level of ideas and policy deliberation: ‘The challenge for social scientists is to understand under which conditions social learning and new ways of thinking become possible’ (1992:18). He sees ideas, policies and institutions as interdependent, but the crucial conceptual difficulty is precisely ‘to explain the relationship between, and to clarify the respective roles of, ideas and interests’ (ibid.: 4). The increased attention to ideational factors during the past years has so far seemingly not enabled any scholar to really fill this gap. In a recent publication, Yee (1996) argues that the causal effects of ideas and beliefs (i.e. ‘ideations’) on policies still constitute an unresolved problem: ‘First, meaning-oriented behaviouralists and ideational institutionalists who focus on causation generally do not analyze the causal mechanisms stemming from the ideas themselves. Second, discursivists who analyze ideas themselves generally do not focus on their causal effects’ (1996:102).39 Jacobsen (1995:285) concludes a review article on various recent contributions on the role of ideas in international relations by stating that ‘authors have not successfully made the case for the “power of ideas”—that ideas have a force of their own—but that they do demonstrate that an ideas approach is always a valuable supplement to interest-based, rational actor models’ (emphasis in original; see also Schumann 1996:105 and Radaelli 1995:160). Even if a simple causal relation between ideas and policies might never be modelled (because ideas need interests to succeed in the political discourse), the recent literature at least suggested some hypotheses which may be useful in studies of the European integration process:

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• Some ‘levels’ of beliefs are harder to change than others. Several authors have suggested relevant (and basically similar) rank-orderings: Peter Haas (1992:3) builds his notion of an ‘epistemic community’ on three levels of shared ideas: normative and principled beliefs which provide a valuebased rationale for the social action of community members; shared causal beliefs which serve as the basis for elucidating the multiple linkages between possible policy actions and desired outcomes; and shared notions of validity, i.e. intersubjectively defined criteria for weighing and validating knowledge in the domain of expertise (see also Goldstein and Keohane 1993b and Sabatier 1993 for distinctions of three levels of ‘beliefs’). • It is plausible that ‘policy ideas and public deliberation matter most when public choice is about issues of efficiency—how to increase aggregate welfare—rather than about redistributing resources from one group of society to another’ (Majone 1993a:1). Furthermore, the potential influence of ideas is higher where the actors’ uncertainty about their consequences is high, when power resources are small, or when the distributional asymmetries between contending co-operative equilibria are less (Garrett and Weingast 1993:186). • This relates to one of the subjects which has recently attracted attention within ‘new institutionalism’: institutional structures are thought to define the channels and mechanisms by which new ideas are translated into policy, to shape the absorption and diffusion of policy ideas; by creating opportunities for some kinds of innovation only, institutions provide for ‘bounded innovation’ (Thelen and Steinmo 1992 with further references). • Furthermore we do know that specific situations allow for better communication and promote learning (Habermas 1981): the less hierarchy involved, the more frequent the interaction, the better. This has led some authors to argue that ‘policy networks’ (see below) are ideal arenas for joint learning processes (see Kohler-Koch 1996a:372; in other words Sabatier 1993:140 hypothesis 7). With a view to the EU, Risse-Kappen expects ‘processes of argumentation and persuasion, the more informal transnational and transgovernmental networks are involved in preparing and implementing decisions’ (Risse-Kappen 1995:13). • A good hint how to trace consensual ideas is to look at situations in which actual behaviour is inconsistent with them: ‘If actors try to legitimize their behavior by referring to the principled idea, if they apologize, or promise and deliver compensation, the normative validity of the idea can be inferred’ (Risse-Kappen 1995:13). The above-mentioned three recent topical aspects of integration theory, i.e. the role of the institutions, the role of the joint shaping of preferences, and

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the role of ideas and policy deliberation, will inform the following analysis of EU social policy. Ultimately, the debate on whether preference formation is endogenous to the European policy process, whether the institutions do indeed play a powerful role and if new ideas help in the development of joint policies can only be settled by empirical means (see also e.g. Gehring 1995:28). 1.1.8 Integration theory as a guidance in the study of EU social policy It has been suggested that especially at this stage of development and differentiation of the EU as a policy-making system, it is essential to look at the ‘submerged’ part of the iceberg (Richardson 1995:4), i.e. to analyse the policy-specific level.40 The common approach is, however, to distinguish between day-to-day policy-making and ‘grand bargains’ (see the criticism by Anderson 1995). This is, on the one hand, often a matter of research economy. On the other hand, it has even been suggested that these different layers of the integration process follow completely different logics and must therefore be looked at through different conceptual lenses (Peterson 1995a, b). As outlined above, various conceptual approaches to European integration have focused on either EC policy-making or on intergovernmental conferences. They have furthermore tended to concentrate on some actors in the integration process only. Although these are viable options, this study follows a different approach, prioritising none of the actors nor ‘grand’ nor day-to-day bargaining. It can be shown that this approach generates new insights on the dynamics of the integration process (and differentiates older ones). That potential insights from specific policy processes may further European integration theory is by no means a new insight: ‘The interplay of values and institutions in the process of integration can thus be studied in the nexus of concrete, day-to-day interests rather than on the plane of a doctrine so general as to be devoid of relevance’ (Haas 1958:59). What is less common is the actual combination of all levels of the policy process (including the quasiconstitutional) applied in this study, in addition to a long-term time frame. Actually, several authors have recently claimed that for a profound analysis which includes institutional development and feed-back loops, a non-static approach is needed (see Gehring 1995:9; Pierson 1996:131; Wind 1997:33). Nevertheless, the dynamics between both day-to-day and grand politics have been one of the rather under-researched areas of the integration process (see also Schumann 1996:69; Cram 1996:55). The following analysis of EU social policy contributes to filling this gap. Instead of adopting one of the above-mentioned integration theory lenses,

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this study will use the empirical material from EC social policy to answer the sets of questions which each of these schools raise. • Are there signs of spill-over (or spill-back) effects in either functional scope, or level of commitment, or regional extension? • Do integrative outcomes indeed ‘depend absolutely on the nature of domestic policy choices and thus on national politics’ (Milward 1992:447)? In other words, are preferences pre-set or do they rather tend to be (re)shaped during the process of EC policy-making? This points to the crucial dividing line between state-centric and ‘supranational’ paradigms: should the EC be viewed as a polity (at least, in the making), or is it an arena for casual co-operation based on negotiation only? • Has each and every decision still ‘to be finely attuned to the wishes of the real powers to which the Union’s continued existence is useful’ (i.e. the nation-states represented by their governments; Milward 1992:446), or do the EC institutions possess some leeway? • Are governments still the gatekeepers of national interest aggregation or does the state no longer monopolise European level policy-making or the aggregation of domestic interests (Marks et al. 1996)? • What is the role of interest groups in European integration? Do they actively prompt it by shifting their loyalties and activities to the higher level (Haas 1958:16), or do they rather respond to the integration process? • Does integration influence intra-group structure, or vice versa? Might a sort of ‘political spill-over’ also work with a view to private interests if they are closely involved in EC policy-making as co-actors? • Is it true that macro-theories can explain the grand bargains? And do they ‘lose their explanatory power’ when it comes to policy-making (Peterson 1995a:84)? • Do intergovernmental conferences in fact comply with the assumptions of intergovernmentalist integration theory? • Are cultural systems of meaning and symbolic structures the key to the understanding of the institutionalisation of (at least parts of) the EU political order (Jachtenfuchs 1995:119)? Because numerous earlier studies have shown that an either/or position misses the point, the conclusions will focus on what might interconnect various approaches, rather than adopt or dismiss either of them. I aim to specify, at least for one policy area, the interplay of ideas, interests, and institutions, i.e. of those three aspects which were particularly highlighted by recent integration research and which may be seen as the major funnels for political choice (see H.Wallace 1996:12; Garrett and Weingast 1993).

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1.2 The role of organised interests in the policy process As outlined in the Introduction, this study analyses both the substantive development and the procedures of EU social policy, in order to reveal possible interdependencies. The theoretical approaches to the process of European integration outlined in section 1.1 mostly include some explicit or implicit assumptions about the role of private interests. However, there is a series of specific political science approaches focusing on this aspect. They are crucial with a view to understanding the central topic of this book, i.e. the development of what I will call a ‘corporatist policy community’. The public debate concerning the Maastricht Social Policy Agreement has so far focused on the controversial British opt-out. However, much more attention needs to be paid to the actual potential of the European Union Treaty’s Social Protocol in terms of the development of both social policy contents and social policy-making procedures. The most significant changes at the procedural level refer to the involvement of organised interests. The new rules provide for an innovative pattern of public-private relations in the EC social policy process. In order to capture these changes in terms of political theory, the following chapter will provide an overview of general political science concepts related to the role of organised interests in public policy-making. These approaches refer to pluralism and corporatism as two opposing ideal-types. We shall see that, so far, the EU has mostly been described as and is expected to stay a pluralist political system. The development of an innovative ‘corporatist’ policy arena at the EU level, i.e. an arena where the representatives of quasi-monopolistic labour and management top federations are responsible co-actors in the decision-making process, thus comes as a surprise for the scholarly prognoses. As will be outlined in later parts of this book, however, the kind of corporatism which is developing under the Social Agreement is different from what was described as ‘corporatism’ in the 1970s. Consequently, a third political science approach will be studied with a view to providing conceptual guidance to our study of EU social policy: the ‘policy networks’ concept. It seems that only a combination of ‘corporatism’ and this more recent school (which points to the level of sectoralised policy arenas) is able to offer an up-to-date analytical framework to capture the recent developments under the Maastricht Social Policy Agreement which will be studied in the main part of this book. 1.2.1 Pluralism and corporatism Study of the twenty years of debate on ‘pluralism versus corporatism’ offers rich insights into the dynamics of scientific fashions and of paradigmatic

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change. Clearly, the fundamental misunderstandings between the ‘(neo)pluralist’ and the ‘(neo)corporatist’ schools of thought and the conceptual incoherence even within the single camps are by no means unique in the history of (political) science. Rather, they show typical features of scientific ‘revolutions’ (Kuhn): it seems to be a common phenomenon that conceptual ambiguity prompts and entertains scientific debate. With the benefit of hindsight, it seems obvious today that pluralist and corporatist writings stressed different descriptive categories and concentrated on distinct empirical constellations of public-private relations rather than offer competing ‘grand theories’ of policy-making. In fact, neither of them presented a fully-fledged and coherent theoretical framework which could be used to explain public decision-making in its entire empirical diversity. Rather than entering into the intricate details of the often heated scholarly exchanges, I shall therefore outline only the most central features of the two approaches in order to show what their concepts offer for the subject of this study. It should be noted that over time, ever more differentiation and re-conceptualisation was done on both sides so that the labels were increasingly blurred. Some aspects of the concept of pluralism can reportedly be traced back to the nineteenth century. However, it was in the 1950s that US scholars increasingly pointed to the paramount role of organised groups (as opposed to individuals) in politics. Pressure groups were seen as a means of providing access to the political system, and as a counterweight to undue concentrations of power (Grant 1995:28). Following disappointment about the ‘unsatisfactory portrait of voter based democracy that was accumulating in empirical studies of the electorate’ (Jordan and Richardson 1987:15), democracy was now perceived to be less firmly linked to the electoral system. In contrast to the former elite model, pluralists assumed widespread, effective, political resources; multiple centres of power; and optimum policy development through competing interests. It was perceived that, usually, all active and legitimate groups in the population could make themselves heard effectively at some crucial stage of the decision-making process. If a particular interest was neglected, it was assumed that a ‘potential’ group would be mobilised to represent it (Jordan and Richardson 1987:15ff.; Grant 1995:28ff.). Indeed, several aspects which were later dominant in the corporatist approach had been already discussed. For instance, unequal success of interest groups in their lobbying efforts was not alien to pluralist perceptions. Notably the neo-pluralists criticised hierarchical, instrumentalist and formalist conceptions of politics. They pointed to the existence of horizontal relations between government, administration and organised interests. But to them, ‘political life seemed to be fluid, amorphous and in constant change’

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(Kenis and Schneider 1991:28). Other empirical constellations, including the predominance of hierarchy, restricted access, stability over time, and compulsory group structures, were paid less attention by the mainstream at least. What was not yet formulated in classic pluralist writing is that pressure groups may actually come to share state authority (Grant 1985b:3). Therefore, pluralism is typically connected with a clear separation of state and society. The state was viewed as the highest control centre of society, and as an arbiter of the competition between interest groups (Cawson 1978:182ff.). The ‘vectors of influence’ (Lehmbruch 1979b:51ff.) were perceived to run only in one direction, i.e. from private lobbies to state agencies. No co-operation was assumed in the narrow sense, i.e. no multidirectional relations. This was completely different in the approach of corporatism which provided a new role for both the state and organised interests which were both involved in decisions on public policy. It was a new perspective to think of the state as a constituent actor in the organisation of collective interests in society (Streeck 1994c:9). Government was thus no longer just passively influenced or ‘captured’ by organised interests ‘representing’ their constituency. Instead, the state was found to be ‘engaged in defining, distorting, encouraging, regulating, licensing and/or repressing the activities of associations—and backed in its efforts, at least potentially, by coercive action and claims to legitimacy’ (Schmitter 1982:260). Furthermore, the interest associations were perceived to be not only transmitting but actively governing their members’ interests. Almost simultaneously, several scholars revived the academic debate on (neo-)corporatism41 in 1974. Strictly speaking, neither the phenomenon (which seems to have occurred first in the Middle Ages) nor the discussion on its features and its legitimacy were new42—but the explicit claim that such patterns constitute an alternative model to the then prevailing pluralist image of policymaking provoked a ‘paradigmatic revolution’ (Schmitter 1982:260). 1.2.1.1 A two-dimensional definition of corporatism The most influential conceptualisation of corporatism is probably Philippe C.Schmitter’s paper ‘Still the Century of Corporatism?’ which was published in January 1974. Schmitter juxtaposed an innovative ideal-type of interest representation with his perception of the older pluralist model: Corporatism can be defined as a system of interest representation in which the constituent units are organized into a limited number of singular, compulsory, non-competitive, hierarchically ordered and

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EU Social Policy in the 1990s functionally differentiated categories, recognized or licensed (if not created) by the state and granted a deliberate representational monopoly within their respective categories in exchange for observing certain controls on their selection of leaders and articulation of demands and supports…. Pluralism is a system of interest representation in which the constituent units are organized into an unspecified number of multiple, voluntary, competitive, non-hierarchically ordered and self-determined (as to scope of interest) categories not specially licensed, subsidized, created or otherwise controlled by the state and not exercising a monopoly of representational activity within their respective categories. (Schmitter 1974:13)

For Schmitter, this ‘elaborate definition’ was an ‘ideal-type description, a heuristic and logicoanalytical construct composed of a considerable variety of theoretically or hypothetically interrelated components’ which would probably not be perfectly reproduced in any extant system of interest representation (ibid.: 14). By contrast, Gerhard Lehmbruch almost at the same time used the term corporatism to describe a pattern of policy formation: the relations between government and organized interest groups take the form of a new corporatism which we shall call ‘liberal corporatism’…the distinguishing trait of ‘liberal corporatism’ is the high degree of cooperation among these groups themselves in the shaping of public policy. (Lehmbruch 1974:53ff.) Lehmbruch opposed ‘corporatist’ co-operation of organisations and public authorities to ‘pluralist’ pressure politics (see Lehmbruch 1982:8 with further references). Following these lines, a corporatist policy-making process was also described as a mode of policy formation in which formally designated interest associations are incorporated within the process of authoritative decision-making and implementation. As such they are officially recognised by the state not merely as interest intermediaries but as coresponsible ‘partners’ in governance and social guidance. (Schmitter 1981:295) It is thus possible to conceive of ‘corporatism’ as a phenomenon with two dimensions, i.e. a structural and a procedural one. Like Cawson (1985a:8), many authors

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saw the combination of these features as the hallmark of corporatism. The structural and the procedural dimensions may thus represent the axes of a two-dimensional graph, with co-operation versus pressure in policy-making, and corporatist versus pluralist pressure group set-ups, as the polar end points of two continua (see Figure 1.1).

Figure 1.1 Corporatism as a two-dimensional phenomenon

The fact that corporatism is an ideal-type model rather than a theoretical approach is expressed by the fact that there is no generally acknowledged set of causal assumptions on the relationship between the two dimensions (Grant 1985b:19). The empirical example of the almost paradigmatic Austrian corporatism (Tálos 1985) shows that its birth involved both state and interest group activism. Favourable framework conditions for corporatism were furthermore found to be an interlocking (Verflechtung) of parties and interest groups (Müller 1985:139 with further references) and the orientation towards ‘systemic requirements’: interest groups accept coresponsibility for macro-economic management with a view to reaching generally accepted ‘common goals’ such as economic growth, full employment, and stable currency (Tálos 1985:42 and 59; Lehmbruch 1985:95). In all cases, the establishment of ‘liberal’ (or neo-)corporatist regimes seems to have needed some ‘flanking’ by the state (Lehmbruch 1979b:62; Streeck and Schmitter 1991:208).

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1.2.1.2 The multiple meanings and forms of corporatism Over time, ‘corporatism’ developed into a ‘highly complex phenomenon (or set of phenomena) of which different dimensions are covered by diverse conceptualizations’ (Lehmbruch 1982:2). Both Schmitter’s and Lehmbruch’s original ideal-types had referred to the macro level, i.e. to entire political systems. Soon, it was thought to be premature to suggest that corporatism was necessarily a phenomenon located on the ‘macro’ level of national policy formation. Wyn Grant, for example, referred to corporatism as a phenomenon that may flourish in particular sectors or locations even when it is absent in a country at the national level: ‘The cumulative impact of such arrangements on the organisation of a society could be as important as highly publicised but weakly enforced tripartite bargaining at the macro level’ (Grant 1985b:4). A multitude of case studies on patterns of interest intermediation uncovered that corporatist ‘arenas’ indeed emerge at the level of industrial sectors, of sub-national political units and/or of single policy arenas (Lehmbruch 1982:27; see e.g. the contributions in Berger 1981; Cawson 1985b; Streeck and Schmitter 1985; Grant 1985a). The new label of ‘meso-corporatism’ (see Streeck 1994c:17) was, however, not applied in a uniform manner. Even today, it is used by different authors to refer to either economic sectors (e.g. the dairy industry), to cross-sectoral policy areas (e.g. environmental policy), and to the regional or local level.43 At least, Lehmbruch is said to be ‘the only notable exception’ to the position that there are no conceptual differences between various levels of corporatism (Williamson 1989:160).44 Initially, the societal actors involved in corporatism were thought to be ‘functionally differentiated categories’ (Schmitter 1974:13), mainly capital and labour. In his 1974 paper, Lehmbruch described the decision-making system in some liberal corporatist regimes as characterised by the existence of two more or less distinct levels of bargaining. He followed an earlier distinction by Kienzl (see Lehmbruch 1974:54) between bilateral bargaining among the interest groups, and multilateral consultation between the government and different interest groups (ibid.: 54 and 57). Subsequently, corporatist regimes without labour participation and even without the state were detected. Subsets of actor constellations were labelled tripartism (which involves both sides of industry and the state), bipartism (only state and business), and private interest government (the self-‘government’ of societal actors; see Streeck and Schmitter 1985:17). Another source of diversity within research on ‘corporatism’ was (and is) whether this term should include a specific style of economic policy (i.e. Keynesianism). Meanwhile, corporatism and specifically ‘macro-corporatism’ in the understanding of many authors do include not only corporatism at the level of the national political system

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(i.e. the systemic level), but also a specific policy orientation, i.e. the steering of the economy by means of Keynesian macro-economic policy. In a nutshell, multiple features were over time attributed to corporatism by various actors. Of these dimensions and levels of ‘corporatism’ found in the literature, all but one allow for the model to be a general one, i.e. to be potentially applied to the full range of political systems. The ‘policy dimension’, however, seems to restrict the approach to some regimes only, and to a specific phase of history when Keynesianism was indeed practised. Even if one assumed a widespread revival of this brand of economic policy, it would still be hard to see why the approach of corporatism should be voluntarily restricted so drastically in its scope. By contrast, it seems more plausible to perceive of the classic 1970s’ corporatism at the macro-level (which typically went together with Keynesianism) as just one specific empirical type or family of a larger class of phenomena. It made the step away from the label ‘corporatism’ to an innovative trademark such as ‘policy networks’ (see below) almost inevitable that in addition to a specific type of interest representation, and a specific type of policy-making, ‘corporatism has been defined as an ideology, a variant of political culture, a type of state, a form of economy, or even as a kind of society’ (Schmitter 1996b:3). Beyond the ‘pluralism of concepts of corporatism’ (Grande and Lang 1982:341), the development of the Western European states and economies was also an impetus for conceptual innovation. The state of economic development, the prevailing economic policy doctrine, and the organisation of politics in general have changed over time. It should therefore be no surprise that corporatism is nowadays likely to be found on the retreat if we focus on the macro-level, understood as the steering of entire economic and political systems. It was clear since the beginning of the corporatism debate in the 1970s that in some policy areas, notably in social policy, corporatist patterns were much more frequently found than in others. Due to changes at the economic and the political level, it is now ever more improbable that within otherwise increasingly fragmented political systems, corporatism should still cover all crucial issues of policy-making such as Lehmbruch’s ideal-type assumed (Lehmbruch 1985:94). Thus, even in the classic corporatist system, i.e. the Austrian, this specific pattern is changing (e.g. Tálos 1993:27; Tálos et al. 1993; Traxler 1996:19). As during the early years of Austrian ‘social partnership’ immediately after the Second World War (Tálos 1985:64), since the mid-1980s it is again a selection of issues rather than socioeconomic policy in its full variety that is subject to such patterns of policymaking (Müller 1985:220). In general, it seems that the contemporary version of corporatism belongs to the sectoral or area-specific level (see Table 1.4). Viewed from the perspective of the classic 1970s’ corporatism

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(which indeed often was macro-corporatism with demand-side steering of the economy), contemporary corporatist arrangements now seem significantly restricted in functional scope. Therefore, they might best be described by a label connected to the current ‘policy networks’ debate (which will be outlined below), i.e. the ‘corporatist policy community’. Table 1.4 Genealogy of ‘corporatisms’ in Europe

Before entering into the details of the most recent approach on publicprivate relations in policy-making, the mainstream considerations in scholarly writing on EU politics and corporatism will be outlined. They constitute the relevant academic background of the subsequent discussion of actual changes to the role of private interests in EC social policy-making. 1.2.1.3 Euro-politics and corporatism While motivated speculation about the politics of a unified Europe prepared the ground for the (re-)discovery of (neo-)corporatism as a concept…, it was not at the European level that modern corporatism was finally found. (Streeck and Schmitter 1991:199)

The most frequently quoted assessment of the relationship between European integration and pluralism is best summarised in the title of Streeck’s and Schmitter’s 1991 paper ‘From National Corporatism to Transnational Pluralism’. The authors stressed that the structure of the system of interest representation

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around and within the Community…was always much more ‘pluralist’ than corporatist; more organizationally fragmented; less hierarchically integrated; more internally competitive; and with a lot less control vested in peak associations over their affiliates, or in associations over their members. (Streeck and Schmitter 1991:200) Both industry and labour were considered to be under-organised. Business was seen to even draw political strength from this state of affairs because it was not attributed any interest at all in accepting corporatist patterns. Concerning the procedural dimension, Streeck and Schmitter missed ‘a real possibility of a mutually organizing interaction effect, a Wechselwirkung, between labor and the two other major players in the political economy, capital and the state’ (ibid.: 204; emphasis in original). The European Community was seen to fall short of the indispensable contribution of public power, of an ‘active, interventionist, nonliberal state which may…institutionalize labor as well as capital as principal participants in a centralized structure of political bargaining’ (ibid., emphasis in original; see also e.g. Traxler and Schmitter 1995a:200). Thus, Streeck and Schmitter came to the conclusion that the evolutionary alternative to neo-liberalism as a model for the European political economy is clearly not…neo-corporatism. More likely appears an American-style pattern of ‘disjoint pluralism’…characterized by a profound absence of hierarchy and monopoly among a wide variety of players of different but uncertain status. (ibid.: 227) Many authors have before (e.g. Sargent 1985) or after that come to a similar overall conclusion.45 This was (at least in the short term) not changed by the Maastricht Treaty, as research carried out around or after the time of its signature shows (see e.g. Keller 1993; Falkner 1993a; Sadowski and Timmesfeld 1994; Keller 1997:25ff.). Since Streeck and Schmitter published their seminal contribution which clearly focused on the macro-level of the EC political system, however, emphasis on the existing differences between sectors and areas increased. The 1990s saw a number of collections of more specific studies on Eurolevel public-private interactions. They focused on specific economic sectors or policy domains (Greenwood et al. 1992a; Mazey and Richardson 1993a; Pedler and van Schendelen 1994; Eichener and Voelzkow 1994a; Greenwood 1995a). In the literature, several authors have described policymaking arrangements or interest group set-ups which are alien to classic pluralism and were, in a few cases, even termed (quasi-)corporatist (see e.g.

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Greenwood and Ronit 1992 for the pharmaceutical sector; Cawson 1992 for consumer electronics; Eichener and Voelzkow 1994c for health and safety in the workplace; and Eichener and Voelzkow 1994d for technical harmonisation and standardisation). The new dominance of a meso-level approach in the realm of the European interest politics had effects beyond the field of this specific scholarship. Even authors who still concentrate on the systemic EC level now tend to mention (at least offhand) that corporatist ‘patches’ may exist (see Karlhofer and Tálos 1996:113; Greenwood 1996:14; Mazey and Richardson 1994:30; Traxler and Schnitter 1995a:201). Although the assertion that singular ‘white ravens’ of non-pluralist patterns may exist has become current practice, an even more fundamental criticism against the mainstream assessment has so far received too little attention: While some arrangements may be characterized as neo-corporatist in character it would be premature to generalize by using broad labels such as ‘corporatist’ or ‘pluralist’ to describe interest group-EC relations. Patterns are too fragmented and do not lend themselves to such generalizations. (Greenwood, Grote and Ronit 1992c:239; see also 248) Indeed, the existence of corporatist patches even logically questions the diagnosis that the EC is, at the macro-level, pluralist (or at least it puts into question the usefulness of such a notion of pluralism). The overall view resulting from issue-specific studies on EC interest politics may appear ‘pluralist’ simply because of the variety of co-existing sub-systems. This should, however, not be taken to mean that it indeed is a pluralist political system in the sense this notion was used in the political science literature outlined above. It is more useful to call an overall system consisting of various diverging sub-systems a mixed one (see Cawson’s suggestion that instead of transnational pluralism, there is indeed a dualism of corporatism and pluralism; Cawson 1992:117). After all, there is no free access for new groups that might form and want to participate if there are distinct parts of the EC political system where at least some specific ones have corporatist patterns. In addition, specific research reveals that the EC institutions are by no means passive vis-à-vis the formation and aggregation of private interests (see also Chapters 3 and 4). In short, recent literature suggests that there is little use in searching for an overarching characteristic for the sum of all sectoral systems regarding policy areas: the differences are too huge, and there are few indicators for convergence mentioned in the literature. To label this deeply segmented system as ‘pluralist’ because the bird’s eye view on all

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areas shows no corporatist picture seems a simplification (see also Cawson 1992:100; Eising and Kohler-Koch 1994:184). A most promising insight to be found in the recent literature is the possibility of a co-evolution of political regimes and interest politics (Eichener and Voelzkow 1994b:17ff.). Implications for the development of more cooperative, maybe even corporatist policy styles have yet to be revealed. If it is true that since the early days of European integration (against the expectations of neofunctionalists), private organisations have not taken the lead but rather followed political initiatives (Kohler-Koch e.g. 1995:16; 1996b; Platzer 1997:178), then major constitutional innovations such as the Single European Act (introducing the Single Market Programme) and the Maastricht Treaty (Economic and Monetary Union, Social Agreement, etc.) should prompt specific developments of interest group organisation and of their involvement in public policy-making alongside relevant new regimes. This will be examined below with a view to post-Maastricht social policy. In order to capture relevant changes, the research design applied here differs from the majority of existing publications in that it does not take a single snapshot of interest politics in a given sector as it stands at the time of writing. By contrast, I explicitly adopt a longer-term perspective which is furthermore connected to the relevant development of the sectoral ‘regime’ under inspection. This approach allows the study of underlying mechanisms in the change of public-private interaction in the policy process. If the hypothesis of a co-evolution holds, specific changes of a regime under the EC Treaty (ECT) might well forward patterns which were described above as corporatist. If, in turn, new political regimes at the Euro-level bring about tripartite policy-making styles with the participation of privileged private interests, corporatism might be a more resilient pattern of governance than most commentators have assumed. In any case, the analyst should pay tribute to changed governance styles at all levels of contemporary European politics. As outlined above, contemporary ‘corporatist’ patterns cannot be expected to mirror the state of the 1970s. Only a meso-level concept seems able to capture that in sectoralised economies and polities, the policy-making process is broken down in and varying across policy subsystems (Atkinson and Coleman 1992:157). Conceptual adaptation is thus a matter of priority and has to include insights from neighbouring bodies of political science literature. Here, the many contributions on ‘policy networks’ seem a very promising input. 1.2.2 Policy networks Recently, the concept of policy networks has replaced ‘corporatism’ as a ‘fashionable catch-phrase’ (van Waarden 1992:30) in the study of state-

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interest group relations. In general, the associations prompted by the image of policy networks allude to a functional diversity of participants in policymaking and a rich variety of possible actor and process constellations. Compared to corporatism, policy networks were characterised as a ‘more general and neutral concept’ because comparisons of countries in terms of the degree of corporatism implied that state-industry relations were selectively viewed through the perspective of corporatism, even in those countries which hardly showed corporatist traits. Here state-industry relations were sometimes forced into the conceptual straitjacket of corporatism. (van Waarden 1992:30) Within the ‘large and confusing variety of different understandings and applications of the concept’ of policy networks (Börzel 1997:5), it is central to distinguish between the network typology and the network governance approaches. The main focus of the former is the more formal one of distinguishing specific types of policy networks, i.e. of various publicprivate constellations in policy-making. The latter, by contrast, has a rather functional focus on the characteristics of a network-like form of governance which is seen as one ideal-typical form of governance as opposed to the hierarchical type of bureaucracy and the non-coupled form of market governance.46 It should be mentioned that most authors claim that not only political science perceptions, but rather the practice of governance per se has changed over time. This is especially so for the more functional network governance literature (Marin and Mayntz 1991b:19; Mayntz 1993:40; Jachtenfuchs and Kohler-Koch 1995; Kohler-Koch 1996a). However, most proponents of the typology approach (see below) would also agree that policy networks are a response to the growing dispersion among public and private actors of resources and capacities for political action, and to increased interdependence and complexity (see e.g. Kenis and Schneider 1991:28). At the same time, the classic adjectives for state-society relations (including ‘corporatist’ and ‘pluralist’) have not been fully discarded. Rather, they are applied as specific categories among others within the new approach. Indeed, a corporatist political system such as outlined above (i.e. characterised by both a corporatist system of interest representation and co-operative procedures of policy formation) might be perceived as a policy network (and this is so at least within the network typology literature; see e.g. van Waarden 1992; Jordan and Schubert 1992). The classic 1970s’ macro-corporatism would thus represent a single cross-sectoral policy network at the state level. Typically, however, the ‘policy networks approach’

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starts from the assumption of differentiated policy-making sub-systems. Consequently, one should look for corporatism at the sectoral (or policyspecific) level as opposed to the cross-sectoral one, in this context. A contemporary analysis of public-private relations should thus start from a sectoral angle, and look at each functional policy network in turn. This will be done with a view to EC social policy. But first, a useful synthesis of the insights in the literature on corporatism and on policy networks is needed, and an analytically promising and practical typology of policy network subcategories. 1.2.2.1 Policy network typologies Predecessors of policy networks can already be detected within pluralist writing of the 1960s. The metaphor of ‘islands’ of decision-making was used to separate arenas and sets of actors for specific functional policy areas (see overview in Windhoff-Héritier 1987:44). During the 1970s, the image of networks as unstable, open, informal, and intricate webs was to be found in German implementation research, for example, where the term network denoted the fact that policy-making includes a large number of public and private actors from different levels and functional areas of government and society (Jordan and Schubert 1992:11 with further references). While political science used the ‘policy networks’ label for a long time in rather general and metaphorical ways, sociometric ‘network analysis’ studied various social configurations in the widest sense and developed detailed variables and measurement criteria (on the two traditions see Kenis and Schneider 1991; van Waarden 1992; Pappi 1993; Dowding 1995; all with further references). A more specific usage was developed in American political science when in 1978, Hugh Heclo described a specific type of state-interest group relations within the political system as issue networks. Such issue networks comprise a large number of participants with variable degrees of mutual commitment or of dependence on others in their environment. As participants move in and out of such networks constantly, it is in fact almost ‘impossible to say where a network leaves off and its environment begins’ (Heclo 1978:102). Heclo opposed this type of government-interest group relations to the older notions of iron triangles and sub-governments which presumed a largely autonomous, small and stable set of participants. In 1979, Jeremy J.Richardson and Grant Jordan described the UK as a ‘post-parliamentary democracy’. Inspired by earlier writing by Heclo and Wildavsky on the spending community in Whitehall, they used the term policy community to convey a very close and stable relationship between policy actors (see Richardson 1995:5).

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EU Social Policy in the 1990s It is the relationship involved in committees, the policy community of departments and groups, the practices of co-option and the consensual style, that perhaps better account for policy outcomes than do examinations of party stances, of manifestos or of parliamentary influence. (Richardson and Jordan 1979:73ff.)

Since the mid-1980s, mainly British scholars have quite controversially discussed the matter of a policy network typology. Competing approaches have, however, not yet led to a satisfying ‘intellectual control over the conceptual currency in circulation’ (Marin and Mayntz 1991b:11). In 1986, R.A.W.Rhodes (on the basis of earlier work by various British authors) distinguished five types of networks ranging from highly integrated ‘policy communities’ to loosely integrated ‘issue networks’. David Marsh and R.A.W.Rhodes built on this model in a co-edited book on policy networks in British government (Marsh and Rhodes 1992; see also Rhodes and Marsh 1992; for a quite different approach using the same terminology see Wilks and Wright 1987). Policy communities and issue networks were presented as the ideal-types and posited at the ends of a multi-dimensional continuum. The term ‘policy network’ was again used as a generic one encompassing all types. The distinctive characteristics were membership (number of participants; type of interest); integration (frequency of interaction; continuity; consensus); resource distribution; and power (balance or not; see table in Rhodes and Marsh 1992:187). The most elaborate policy network typology so far was presented by Frans van Waarden. His ‘refined and systematic concept of state-business relations’ (van Waarden 1992:29) was designed as a tool for comparative analysis, a systematisation of policy network labels in the literature. Building on earlier approaches by Atkinson and Coleman and Katzenstein, van Waarden distinguishes seven dimensions of policy networks (each of them with multiple sub-dimensions): actors; function; structure; institutionalisation; conventions of interaction; distribution of power; and strategies of public administration. The seven dimensions and their sub-dimensions subsequently figure along the vertical axis in van Waarden’s ‘Table 1’, entitled ‘characteristics of policy networks between state agencies and organized interests, found in the literature’. On the horizontal axis he names eleven types of policy networks: statism/ pantouflage; captured statism; clientelism; pressure pluralism; sectoral corporatism; macro corporatism; state corporatism; sponsored pluralism; parentela relations; iron triangles and issue networks. In the resulting boxes he tries ‘to characterize these types on the different network dimensions’ (van Waarden 1992:38). This effort builds only partly on proper definitions of specific labels in the literature. In order to fill the extra-definitional characteristics, it obviously relies on findings of various case studies on empirical policy networks

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regarding ‘educated guesses’ of what would be the most probable outcome for a specific type of pattern. Van Waarden’s Table 1 is therefore a mixture of definitional properties, of empirically found characteristics and of characteristics perceived of as the most probable empirical findings for a specific type of policy network. On this basis, van Waarden constructs a typology of these abovementioned types of policy networks using now only three dimensions as coordinates (his ‘Table 2’): ‘number and type of societal network participants’; ‘the major function of the networks’; and ‘balance of power’. The result is a table of twenty boxes, of which he fills sixteen with the eleven variants of policy networks as outlined above. Statism, pressure pluralism, issue networks, (sector) corporatism, and parentela relations appear in two boxes each. Van Waarden’s contribution was seminal and it seems worthwhile to continue on the path which he pointed out. Nevertheless, there are some shortcomings to be overcome. His typology builds on three dimensions which are not chosen systematically but because the author attributed to them special plausibility (see also Pappi 1993:90).47 De facto, however, they conflate more dimensions (e.g., the number, the character, and the presence of conflict all come under ‘number and type of societal network participants’). Important other variables are excluded from the typology. For instance, whether the participating groups possess representational monopolies is included in van Waarden’s ‘Table 1’ (‘characteristics of policy networks found in the literature’), but not in the typology (‘Table 2’). The most famous definition of corporatism by Schmitter (see section 1.2.1), however, builds on this actor characteristic. A great deal of information which is crucial in at least some of the concepts is lost on the way from van Waarden’s list of characteristics to the typology. Neither the stability of the network over time, nor the level and encompassing character of network activity (with regard to a policy area, a sector, or a subsector) are included in the typology. The result is that labels such as the major catch-word in the British debate, ‘policy community’, cannot be assimilated. In short, van Waarden’s typology seems very complex but still partly under-specified: it includes too few dimensions to capture the elements of well-known labels, but builds on too complicated clustering to make obvious the attribution of the already well-known conceptual trademarks. In that context, it is of particular interest that other authors have suggested that the added value of the continued use of most of these labels is quite limited. Grant Jordan and Klaus Schubert edited a special issue of the European Journal of Political Research devoted to the conceptual and empirical study of policy networks, in 1992. Their joint article represented the third contribution which aimed at bringing order into the conceptual jungle. Jordan and Schubert share with Rhodes and Marsh (1992) and van Waarden (1992) that they want to see policy networks as a neutral concept, as ‘a generic label embracing the different types of relationship state/interest

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group that exist in the process of determining any individual policy output’ (Jordan and Schubert 1992:10). They, too, want to demonstrate that a variety of terms in common use can be plotted against selected dimensions of policy networks (ibid.: 12). In contrast to van Waarden’s extremely complex effort, they offer a rather slim network typology. They consider their preferred dimensions to be easier to use empirically, while they feel that van Waarden’s approach offers too much ambiguity (ibid.: 12). The dimensions which Jordan and Schubert use to ‘“place” the different terms from the literature in relationship to each other’ (ibid.: 25) are number (i.e. the scale of bodies involved in the network), sectoral or transsectoral level, and stability. The result of this effort is a table which shows more empty clusters (eleven) than occupied ones (five), and in which five out of the eleven applied labels belong to the class of ‘restricted number of groups+sectoral +stable’. The authors claim that this is not due to their catalogue of dimensions but rather to shortcomings of the classic labels: Using these three dimensions it is difficult to disentangle meso corporatism, iron triangle, corporate pluralism, negotiated economy, policy community, clientelism. It would perhaps be possible to present these concepts in ways that would better distinguish one from the other. Our point is, however, that nowhere in the literature is a convincing contrast to be found. (Jordan and Schubert 1992:26) The Jordan-Schubert paper offers useful criticism of the use of labels in political science literature. The major strength of their paper is that they make obvious how several labels from the older literature (notably iron triangles, corporatist pluralism, and group sub-government) are ‘suspiciously similar’ (ibid.: 26). Admittedly, they did not, however, develop a satisfying conceptualisation for further research on policy networks. This state of the art perspective invites the construction of fewer and more simple ideal-types. If some of the older labels are indeed quite close to each other, a limitation of policy network sub-groups seems possible even without much sacrifice in terms of differentiation. I suggest including only the three most frequently used labels in the contemporary debate, i.e. issue network, policy community, and corporatism, in a group of ideal-types. Concerning the definition of corporatism (as opposed to pluralism), I suggest going back to the origins of this political science debate (see section 1.2.1) to the still comparatively parsimonious concepts of Schmitter and Lehmbruch, and perceiving of corporatism as a two-dimensional phenomenon, i.e. with both structural and procedural characteristics. The comparison with the characteristics used by Heclo and Rhodes and Marsh for issue networks and

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policy communities shows that pluralism and issue networks as well as corporatism and policy communities are related concepts as they share important characteristics. Besides the use of two ideal-typical opposite models (pluralism-corporatism and issue network-policy community), central characteristics of policy communities come close to Schmitter’s ideal features of structural corporatism: the limited number of mainly economic and/or professional interests as well as the capacity to deliver members. Furthermore, a certain basic consensus on systemic requirements and public interest (e.g. economic growth, stable currency) was also a frequent feature of (and sometimes even an assumption about) corporatist systems (see e.g. Lehmbruch 1984:62). When explaining the resource dimensions for issue networks, Rhodes and Marsh furthermore mention that the function is consultation only. This implies that the opposing ideal-type, i.e. policy community, should include co-operation in decision-making—which is Lehmbruch’s criterion for procedural corporatism. However, ‘corporatism’ goes further than ‘policy community’ in a series of characteristics. They may be grouped under the headings ‘state activism’ with a view to the structure of the system of interest representation (licensing of interest groups; compulsory group membership; high degree of state control over groups), ‘delegation of state authority’, and ‘exclusive group status’ in the wider sense (i.e. singular groups; granted a representational monopoly by the state). If policy communities fit the ideal description of corporatism (at the level of policy sectors) for all relevant categories except those involving three dimensions (i.e. some delegation of authority to the private interests who are decisively involved in public policy-making; some state interference in their status and internal affairs with regards to their bargaining capacity; and an exclusive status of the involved interest groups), a corporatist policy network may indeed be perceived as a specific sub-group of policy communities (see Figure 1.2) which goes beyond the latter label by fitting also those three further characteristics. ‘If policy networks emerge in response to the exigencies of policy making under changing conditions, it should be possible to observe that policy networks change structurally over time’ (Marin and Mayntz 1991b:19). The conceptualisation of policy networks and ideal sub-types as elaborated above is a useful basis for comparative research not only at the cross-sectoral or cross-regional, but also at the diachronic, level. It is furthermore suitable for visualising the changes which might occur. This concept is applied below when it comes to recent changes in EC social policy-making. 1.2.2.2 The network governance approach If policy network typologies score high in intellectual currency notably in the UK, there is a certain continental hegemony in the study of ‘network

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Figure 1.2 Policy network ideal-types

governance’. In the early 1990s, several political scientists based in Germany and Austria edited books on the functional logics of ‘policy networks’ (Marin and Mayntz 1991a; Scharpf 1993a). Useful insights e.g. in ‘games’ within networks were developed (see e.g. Scharpf 1993b; Tsebelis 1993; Sabel 1993), and elaborate case studies in the qualitative as well as the quantitative tradition were carried out. Although no single conceptual approach to ‘policy networks’ was yet developed,48 Kenis and Schneider’s (1991:42) ‘tentative definition’ of policy networks as ‘integrated hybrid structures of political governance’ with the distinctive capacity for mixing different combinations of bureaucracy, market, community, or corporatist association as integrative logics is much quoted. Within such a network, the single public or private actors are relatively autonomous despite intentionally producing joint results (see Mayntz 1993; Héritier 1993a). Beate Kohler-Koch sees governance in networks as an appropriate response to these challenges because she perceives it to be characterised by co-operation instead of competition, in a ‘multi-stratified informal decision-making process between groups’ (Kohler-Koch 1996a:370). The ‘change in governance’ perceived by Kohler-Koch encompasses a different role for the state which is more an arena than an actor as it performs process management instead of steering from above; different rules of behaviour (upgrading of common interests); different patterns of interaction (interchange on an equal footing instead of a hierarchy); and a different level of political action: ‘brought

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down to those affected by the policy whose active support is needed for implementation’ (Kohler-Koch 1996a:372). Indeed, EU politics appear as a specifically interesting phenomenon under this lens. Kohler-Koch holds that the policy networks approach and the study of the European policy process are an ideal fit.49 According to Kohler-Koch, European integration even spreads the new mode of (network) governance as a ‘new philosophy’ of governance, based on co-operation. It is not just the well-known assumption that pooling sovereignty facilitates joint problem-solving and thereby enhances the action capacity of states. Integration relates to the fact that political actors are drawn into a new game of politics and policies. They are induced, rather than forced, to redefine their strategies. (Kohler-Koch 1996a:366) Without doubt, the ‘transformation-of-the-state hypothesis still requires comprehensive empirical testing’ (Börzel 1997:26). It seems worthwhile to ask if a development such as outlined by Kohler-Koch can be found in EC social policy. Adrienne Héritier also holds that the European Union is an ideal field of policy network analysis due to typical characteristics like sectoralisation of politics, functional differentiation and incoherence, and the dominance of corporate actors in a horizontal net of cross-organisational interactions based on negotiations (Héritier 1993b:435). Drawing on an empirical research project on EU air pollution politics, Héritier attributes specific characteristics to integrated national-supranational networks (ibid.: 435). In EU regulatory politics, she notes low stability, high fluctuation of actors, and a lower degree of institutionalisation than compared to the national level. She attributes these results to the facts that the relevant policy networks are younger than usually at the national level (in EC environmental policy approximately twenty years), and that they are mainly networks of policy formulation (while stability comes mostly from established patterns of interaction in the implementation of policies; ibid.: 435). Because they are usually occupied with the elaboration of new EC policies, they are of limited duration and built from scratch according to the issue at stake (this suggests that in the network typology vocabulary, they would be issue networks rather than policy communities). For Héritier, the major structural properties of European policy networks are heterogeneity and multiple levels, combined with a high centrality of one actor, i.e. the European Commission. The relationship between networks is segmented and incoherent. Within the networks, there is rivalry between belief systems and policy options (ibid.: 438). Also, there is intensive competition for problem definition and for

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a ‘first mover advantage’ (see also Héritier 1996). This study will investigate whether this is also true for the area of EC social policy. In sharp contrast, Hussein Kassim (1994) put forward ‘a sceptical view’ on policy networks and EU policy-making which was convincingly countered by John Peterson (1995b). Peterson, however, does not see policy networks as a general model for the European policy process: he deems any macro-theory for the EC policy process unrealistic. Both intergovernmentalism and neofunctionalism he sees as ‘pitched’ against the ‘highest level in EU politics’, i.e. history-making treaty decisions at the constitutional level in the wider sense (treaty revisions; crisis of empty chair).50 He claims that they ‘do not really explain—or seek to explain—the outcomes of EU policy making, except when particularly monumental polices are adopted’ (Peterson 1995b:399; emphasis in original). This leads him to confine himself to models for single stages of the policy process (i.e. ‘policy networks’ for policy-shaping), and to accept that ‘policy analysts will draw different conclusions about the nature of EU governance, depending on which level of analysis, or “tier of governance”, they choose to focus on’ (ibid.). Donald Puchala (1972) put forward the famous metaphor of blind men researching the ‘elephant’ of European integration while each touching different parts of the animal. While Puchala urged a search for a joint theoretical effort to understand the whole phenomenon beyond its single parts, Peterson’s de facto approach leads in the opposite direction. Not only is there the danger of a return to relying on pure phases heuristics when reflecting on decision-making processes. Combined with the almost inevitable sectoral differentiation due to the fragmentation of EC policymaking, researchers might end up analysing not only single limbs of the ‘integration elephant’, but would (if following Peterson’s approach) even break down these—de facto sectoral—research units into temporal phases.51 But this problem is not only a matter of Euro-level analysis, it rather leads to the more general debate on the analytical status of the policy networks approach. Several writers have claimed that the ‘policy network’ label is only a pure metaphor or at best a (more or less elaborated) inventory for comparative research: ‘This lepidopterist approach to political science does not help an explanation of the political institutions or policy outcomes unless it is connected somehow with dynamic models linking the sub-categories in structural or causal explanations’ (Dowding 1995:141). The essence of the argument is whether the ‘policy network’ tradition belongs to the field of empirical theory (in the narrow sense) which is concerned with establishing causal relationships, or not. The intermediate steps on what may be perceived as a continuum between an ad hoc description of a phenomenon (or a group of phenomena) and a systematic explanation based on causal

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relationships are ‘models’ and ‘conceptual frameworks’ (e.g. Stoker 1995:17). Models represent simplified pictures of reality by identifying important components of a system without positing relationships between variables. Conceptual frameworks go further in their attempts to explain reality by providing at least some interpretations of relationships between variables. In order to put into perspective the ‘theoretical content’ of the policy networks tradition, a look behind the current controversy is instructive: the comparison with earlier traditions of abstract thinking about the policy process (see section 1.2.1 on pluralism and corporatism) helps to discern the policy networks approach’s core assumptions more clearly. It indicates that the policy network writers share common ground concerning a few basic insights—and in so far as the ‘policy networks’ approach goes beyond a pure metaphor: • due to various economic and societal developments, policy-making is broken down into area-specific arenas with potentially significant dissimilarities even within the same political macro-system; • there is the possibility (indeed, even a high probability) that both public and private actors participate in decision-making on public policies; and • the existence of clusters with specific actors over time bears effects, it may lead to similar perceptions, to a common ‘culture’, and even to a specific ‘policy style’ (Richardson, Gustavsson and Jordan 1982). The explanatory power of these statements is weak because causal relationships are basically lacking. Therefore, the policy networks approach seems to fit in the category of model. There are no commonly shared hypotheses concerning relevant questions such as: Are there causal relationships between the single dimensions of networks, and what are they? What is the connection between the network variables, on the one hand, and outcome variables, on the other? (Only at first glance, the network governance school seems comparatively more ‘theoretical’ because of its more abstract character. In fact, however, policy networks here again represent an ideal-type, i.e. one specific model of governance.) In fact, some writers have praised the usefulness of ‘policy networks’ as a comparatively young political science tradition despite the need to combine it with theoretical approaches in order to allow for explanatory or predictive conclusions (Rhodes and Marsh 1992) or even because it offers a grid open for connection with a variety of useful analytical approaches (Héritier 1993b). Adrienne Héritier in fact favours a ‘multi-analytical approach within policy network analysis’ (Héritier 1993b:433, author’s translation) with a view to explaining the behaviour of network participants: inter-organisational

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resourcedependence theory, institutionalism, interactionist perspective, and policy analysis can in her view all account for useful explanatory assumptions. These approaches may, according to Héritier, furthermore be combined with the ‘belief systems’ concept (see e.g. Sabatier 1993) so that a non-parsimonious but realistic approach results. This seems indeed a very promising concept. In the frame of this study on EC social policy, the policy networks approach will indeed be combined with various theoretical lenses from the field of the ‘integration theories’ (see section 1.1), notably the neofunctionalist spill-over concept, the intergovernmentalist jointdecision trap, (neo-)institutional activism and the suspicion that processes of identity formation occur at the Euro-level. 1.3 An inclusive analytical framework for the study of EU social policy in the 1990s So far, Chapter 1 has presented a survey of theoretical approaches to European integration and to public-private interaction patterns in the policy process. The following empirical analysis of EU social policy is based on an inclusive analytical framework. It pays special attention to possible dynamics towards further integration (using the neofunctionalist concept of spill-over) and to intergovernmentalist theorems (such as the joint-decision trap). It thus tests causal assumptions of the ‘grand theories’ of European integration. This analysis nevertheless goes beyond that by paying attention to various aspects which have recently (once again) received increased attention in the scientific community, although they are not theories in the sense of full causal explanation: ideas, interest formation, and institutions. This study thus explicitly includes the level of communicative action at the European level. It goes beyond a purely ‘rationalist’ approach exclusively based on power games and economic interests. In addition to expecting that ideas and interests are ‘negotiated’ through the interactions within the EC institutions (see H.Wallace 1996:35), i.e. that they are imported from the national realm but may be traded at the EU level, the framework applied in this book assumes that interests may indeed be reshaped and principled ideas created in EU politics. I would suggest placing the integration theory approaches outlined in section 1.1 on a continuum between the EU as an international organisation with intergovernmental bargaining on pre-set preferences only, on the left end, and with the EU as a political system where (at the extreme) even processes of joint identity formation occur, on the other end (see Figure 1.3). The analytical framework applied in this book allows for potential empirical results even at the far right end of this continuum. With a view to the role of private interests, I doubt that they are indeed the main motors of European integration such as Ernst Haas expected.

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Figure 1.3 Preference/identity formation and European integration theory

The analytical framework underlying this study therefore allows for potential influence by ‘the state’ (i.e. the EC institutions) on the system of interest intermediation. Applying the concise ideal-typical forms of policy networks developed in section 1.2.2 (i.e. issue network, policy community, and corporatist policy community), this book hence traces if and why the actor constellation and the relationship between the members of the EC social policy network have changed over time. Because the private interests are deeply involved in communicative processes at the EU level, they are prone to being influenced while they are themselves lobbying. The same is, however, true for the other participants of EU policy-making, including the national bureaucrats and governments. I agree with Jeremy Richardson who sees preference formation as a possible key to understanding the changing behaviour of the different stakeholders who constitute a policy community: It is not just interest groups who have to adjust their position and tactics according to the prevailing climate of opinion—so do public bureaucracies and national governments. In the end, they are all vulnerable to ‘climatic’ changes or ‘shifts in policy fashion’. (1997:31) This points to communicative processes as connecting all who are involved in Euro-politics.

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In my view, no actor is only a robotic repetitor of pre-determined stances. By contrast, it seems that communicative action and joint interest formation in fact represent a frequently missing link in integration theory. Processes of communication do not only connect the various actors in the integration process who were often juxtaposed for analytical purposes (e.g. public and private actors;52 governments and supranational institutions): discursive practice and ideas also interconnect the levels of EU activity (i.e. policymaking and the ‘grand bargains’ in intergovernmental conferences) as well as the phases of the policy process (decision-shaping and decision-making). Last, but not least, communicative action does not stop at the edge of the ‘EU level’ but rather extends over the political space of both the EU and its member states. Discursive practice and learning thus interconnect the tiers of the multi-level system. While national options in fact influence the EU (what is exclusively underlined in the intergovernmental approach), EUlevel processes of joint preference formation are a relevant factor, in turn. They may not only direct EU policy options away from the pure parallelogram of forces consisting of initial member state positions, but may subsequently trickle down in national processes of preference formation. The impact of Euro-politics in the member states may thus reach far beyond the pure implementation of EU law. Without doubt, there is a price to pay for such an inclusive approach: it leads us away from attempting, like Moravcsik does, to explain European integration with only a few causal hypotheses in a parsimonious theory. I hold that this is necessary for a realistic research design and that it represents an acceptable sacrifice, at least for the present state of the art. In turn, however, my inclusive approach with a focus on communicative action goes beyond atomising the object of study into ever smaller temporal slices and actorspecific bits of reality. In short, this study pays attention to the roles of governmental influence, EU institutional activism, functional pressures, and communicative processes in European integration. The latter have often been neglected despite their cement-like character between all the other parts of the puzzle. This book aims to sketch the dynamic and holistic picture which some neofunctionalist writers originally aimed at but which in day-to-day neofunctionalist writing was sacrificed for other goals such as constructing a predictive model.

2

Social policy from Messina to Maastricht

The Treaties establishing the European Communities did not provide for the Europeanisation of those market-correcting mechanisms which are usually known as ‘social policy’ in the wider sense at the member state level (i.e. notably basic social rights, social security and labour law).53 Against the background of scarce legal competences, the actual accomplishments of EU social policy development as well as the role of the European institutions therein are of particular interest. Was the European Commission (possibly supported by other actors) pushing towards increased social integration? If so, to what extent was it successful as an agent for change? This chapter will provide an overview of the development of the so-called social dimension of European integration. Both the substantive and the procedural level will be considered. The EU social policy activities (see section 2.1) will be analysed in the frame of two competing political science concepts designed to understand the integration process, i.e. the neofunctionalist concept of spill-over; and Scharpf’s joint-decision trap. Subsequently, this chapter will study the role of private interests in EC social policy prior to the Maastricht Treaty (see section 2.2). The empirical development will again be viewed through the lens of a political science concept, i.e. Wolfgang Streeck’s corporatist ‘decision gap’.54 Against this background, the social policy innovations of the Maastricht Treaty will be analysed in Chapter 3. 2.1 The development of the ‘social dimension’ up to the Maastricht Treaty Two levels of social policy provisions are of interest when it comes to studying relevant EU activities: the quasi-constitutional provisions of the Treaties establishing the European (Economic) Community, the Coal and Steel Community, and the Atomic Energy Community which attribute selective competences for social policy interventions at the European level (see section 2.1.1); and the secondary legislation by the EU institutions which sets in place specific social policy activities at the supranational level 55

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(see section 2.2.2). Both the levels of Treaty provisions and of derogated EC law are relevant to the question of whether spill-over processes actually occurred in the realm of social policy. As outlined in section 1.1.1, the neofunctionalists expected functional spill-over to extend the issues of joint policy-making, political spill-over to intensify existing co-operation (mainly on the basis of QMV) and geographical spill-over to extend the area covered by European co-operation. From another viewpoint, the EEC was expected to be stuck in a ‘jointdecision trap’ (Scharpf 1988, see section 1.1.2). In the old Treaty of Rome, the EEC social policy regime was characterised by features which Scharpf perceived to cause the ‘pathology of interlocking politics’ (Scharpf 1988:254) because the lower level (i.e. national) governments decided on EC legislation and this had to happen unanimously. Did this situation in fact block any ‘“gradualist” way of transformation…into an institutional arrangement of greater policy potential’ because ‘all possibilities of institutional transformation are entirely determined by the self-interests of national governments’ (Scharpf 1988:271, 267ff.)? 2.1.1 Social policy in the EC Treaties The Treaty establishing the European Coal and Steel Community (ECSC) (signed in Paris on 18 April 1951) and the Treaty establishing the European Atomic Energy Community (signed in Rome on 25 March 1957) already contained some social policy provisions. Because these two Communities are concerned with rather narrow functional scopes of integration, the relevant competences are, however, restricted to the coal/steel and the atomic energy sectors, respectively. They include general tasks such as contributing to the ‘growth of employment and a rising standard of living in the member states’ (Article 1, ECSC Treaty). Measures to establish the free movement of coal and steel workers (Article 69, ECSC Treaty; Article 96, Euratom Treaty) and specific aids for relevant workers were provided for (tideover allowances, resettlement allowances, vocational training finances in Article 56.2, ECSC Treaty). In addition, basic standards for the protection of the health of workers and of the general public against the dangers arising from ionizing radiation were to be specified (Article 30, Euratom Treaty). Of a cross-sectoral relevance are, by contrast, the social policy provisions of the Treaty establishing the European Economic Community (signed in Rome on 25 March 1957) which will therefore be studied in more detail. Different schools of thought on social policy participated in the negotiations on the EEC Treaty. While some member states pleaded for the neo-liberal concept of market-making only and wanted to set the market forces free even in the realm of labour and social security costs (notably

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Germany), others opted for at least a limited degree of harmonisation with a view to social and labour costs (e.g. Beutler et al. 1987:437). The French delegation in particular argued that its comparatively high social charges and the constitutional principle of equal pay for men and women might constitute a competitive disadvantage. Italy argued that the opening of market frontiers might be costly for the already disadvantaged south of the country. In the end, a compromise was found which did not provide for social policy harmonisation at the European level. The dominant philosophy of the Treaty was that welfare would be provided by the economic growth stemming from the economics of a liberalised market and not from the regulatory and distributive capacity of public policy (see e.g. Kohler-Koch 1997a:76). Nevertheless, the Treaty contained a small number of concessions for the more ‘interventionist’ delegations. These are mainly the provisions on equal pay for both sexes (Article 119, EECT), on maintaining ‘the existing equivalence between paid holiday schemes’ (Article 120, EECT), and the establishment of a ‘European Social Fund’ (Articles 123–128, EECT). Two of the three above-mentioned concessions (i.e. equal pay and the Social Fund) were to gain significant importance during the process of European integration (see section 2.1.2), while the statement regarding the equivalence of paid holiday schemes saw no follow-up. The other provisions of the EC Treaty’s Title III ‘social policy’ bear witness of the will to include some social policy provisions yet without empowering the EEC to act. At some points, the opposing views among the signatories are recognisable in solemn but equivocal words (see e.g. Article 117, EECT). The Commission was given ‘the task of promoting close cooperation’ between member states in the social field, particularly in matters relating to employment; labour law and working conditions; basic and advanced vocational training; social security; prevention of occupational accidents and diseases; occupational hygiene; the right of association; and collective bargaining between employers and workers (Article 118, EECT). However, while in other areas of EEC activity, the Commission was empowered to present legislative proposals with a view to Council deliberation of binding EC law, the Commission should only ‘act in close contact with member states by making studies, delivering opinions and arranging consultations both on problems arising at national level and on those of concern to international organizations’ in the social area. In legal terms, Article 118 of the EECT therefore represents a confirmation of the member states’ responsibility for social policy (Vogel-Polsky 1989:180). If functional for market integration, however, intervention in the social policy field was—implicitly—made possible. Provisions in the member states which ‘directly affect the establishment or functioning of the common

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market’ could be effected by unanimous Council decision on a Commission proposal (Article 100, EECT). Furthermore: If action by the Community should prove necessary to attain, in the course of the operation of the common market, one of the objectives of the Community and this Treaty has not provided the necessary powers, the Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, take the appropriate measures. (Article 235, EECT) These two subsidiary competence provisions (Articles 100 and 235, EECT) were to, from the 1970s onwards, provide a ‘back-door’ for social policy harmonization at the EC level. The necessary unanimous Council votes, however, constituted high thresholds for joint action—the situation was thus a classic joint-decision trap (Scharpf 1988). The only explicit Community competence for social policy regulation under the original EECT was outside the title on social policy. It was in Part II (‘Foundations of me Community’) which contains the free movement of goods, persons, services, and capital. Articles 48–51 of the EECT thus provide for the establishment of the freedom of movement for workers as part of the Treaty’s market-making activities. This entailed the abolition of any discrimination based on nationality between workers of the member states as regards employment, remuneration and other conditions of work and employment (Article 48, EECT). In order to ‘adopt such measures in the field of social security as are necessary to provide freedom of movement for workers’ (Article 51, EECT), the Council was mandated to make arrangements, on Commission proposal, to secure for migrant workers and their dependants the aggregation of all periods taken into account under the laws of the several EEC countries for the purpose of acquiring and retaining the rights to benefit and of calculating the amount of benefit. The fact that payment of benefits was extended to persons resident in the territories of other member states has had a significant impact on the national social security regimes (see section 2.1.2). In 1987, the Single European Act (SEA) came into force as the first major EECT revision. As in the 1950s, an economic enterprise was at the heart of a fresh impetus for European integration. But along with the Internal Market Programme being solemnly put on track, social policy again constituted a relevant issue. How much social state building should go along with even more far-reaching market integration? In various so-called ‘flanking’ policy areas, notably environmental and research policy, EEC competence was formally extended (see Articles 130r–t and 130f–q, EECT). Not so for

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social policy: the delegations were not willing to give the EEC a much greater role in this field. Only two exceptions were made to this general rule. One of them was (at least in the short run) rather minor: Article 118b of the EECT provided that ‘[t]he Commission shall endeavour to develop the dialogue between management and labour at European level which could, if the two sides consider it desirable, lead to relations based on agreement’ (emphasis added). But the second concession, i.e. Article 118a of the EECT on minimum harmonisation related to health and safety of workers, was soon to provide an escape route ‘out of the joint-decision trap’: it allowed, for the first time in European social policy, for Directives based on a qualified majority of the Council members only. This was possible mainly because the wording and the definition of key terms of the relevant provision were equivocal: Member States shall pay particular attention to encouraging improvements, especially in the working environment, as regards the health and safety of workers, and shall set as their objective the harmonization of conditions in this area, while maintaining the improvements made. In order to help achieve the objective laid down in the first paragraph, the Council, acting by a qualified majority on a proposal from the Commission,…shall adopt, by means of directives, minimum requirements for gradual implementation. (Article 118a, EECT) The provisions adopted pursuant to this Article are minimum regulations, i.e. they do not prevent any member state from maintaining or introducing more stringent measures for the protection of working conditions otherwise compatible with the Treaty. Nevertheless, reluctant member states can under this provision be forced to comply with the majority of the EU member states, even against their will. Why was this selective political spill-over, which represented a small step towards an exit from the joint-decision trap, possible during the IGC 1985–86? Above all, occupational health and safety is closely connected to the Internal Market: if all goods are to circulate freely, there has to be some common policy with a view to minimum security requirements e.g. for those goods which will be used in factories (such as machines) and constitute a potential risk for human health. The elimination of ‘technical barriers to trade’ made Community action attractive in the perception of relevant policy-makers (see Schulz 1996:18ff.). In addition, insiders argue that prior ‘good practice’ in the area of workplace health and safety was another important element leading up to the political spill-over with the SEA: that

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the governments had experienced a number of perceivedly successful joint policy-making procedures in the area reportedly made it easier for them to give up their veto position. Thus, the proposal by the Danish delegation for a new Article 118a to the EECT to the IGC was taken up immediately by all other governments and accepted in its final form after only a few days (Schulz 1996:40). Neither the Thatcher government nor any other did, however, expect this perceivedly ‘technical’ issue to significantly facilitate social policy integration in the decade to come (see below). More successful was the Thatcher government when it tried to prevent the giving up of unanimity in order to facilitate Internal Market legislation in the narrow sense, from spilling over to social policy. Article 100a of the EECT allows for QMV on measures ‘for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market’. However, this does explicitly ‘not apply to fiscal provisions, to those relating to the free movement of persons nor to those relating to the rights and interests of employed persons’ (Paragraph 2). Up to the Maastricht Treaty, all EEC social policy measures adopted pursuant to so-called subsidiary competence provisions (i.e. Articles 100 and 235, EECT) thus needed a unanimous Council vote. Only in the area of worker health and safety was there a possibility of outvoting reluctant member states. The ‘joint-decision trap’ should therefore have had a wide field of rule. Nevertheless, the following analysis of relevant secondary legislation, i.e. of actual EEC activities within social policy, reveals that the opposite conceptual lens, i.e. spill-over dynamics, is indeed also applicable. 2.1.2 EC social legislation and policy: an overview There is a rich literature on the development of EC social policy with a main focus on legal aspects (see e.g. Schulz’s overview [1996:7ff.] in a footnote which takes up one and a half pages). By contrast, this brief analysis of relevant developments from the 1950s up to the late 1990s will only provide an overview, notably with a focus on EC labour law (not e.g. the European Social Fund which co-finances retraining and relocation of workers) and on useful political science concepts (for more detail see Falkner 1997). Almost immediately after the EECT came into force, a co-ordination of national social security systems was put in place with a view to protecting the social security rights of migrants (see e.g. Schulte 1990). Co-ordination does not harmonise the social security systems as such, but it imposes the equal treatment of EU citizens and of nationals within them. The central features of this co-ordination are the aggregation of insurance claims collected anywhere within the Community, and the export of benefits to the member state where the beneficiary actually lives. The various member

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states concerned will pay on a pro-rata-temporis basis. In the field of social security co-ordination, a number of functional spill-overs have occurred (Watson 1993b: 154ff.; Leibfried and Pierson 1995:53ff.). For example, a broad interpretation of the ‘family’ which may accompany the migrant worker was applied. The notion of social or tax advantages which have to be equally granted to migrant workers was broadly interpreted by the ECJ, too. Although the substance of the various national social insurance systems is not directly touched by the EC co-ordination, there are several indirect effects which in fact do restrict the national welfare states’ room for manoeuvre (see e.g. Leibfried and Pierson 1995:64 and 1996:196). A particularly instructive example of functional spill-over brought about by the ECJ is gender equality. Within the original EEC Treaty’s social provisions, Article 119 represented the sole specific legal obligation for the member states. Its wording obliged them to ‘ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work’ by the end of 1961. Nevertheless, none of the member states actually secured such equal treatment for its women citizens—up to the mid-1970s! It was two courageous Belgian women who finally brought the matter to the courts: the lawyer Eliane Vogel-Polsky, and the stewardess Gabrielle Defrenne who had been discriminated against by the Belgian airline SABENA (for details see e.g. Falkner 1994a:77–122; Hoskyns 1996:60–77). Only under the shadow of judicial review would the governments finally start implementing the obligations which they had accepted in 1957. A decisive factor in this development was the process of supranationalisation of EC law (e.g. Weiler 1982). In a landmark ruling (case 43/75, Defrenne II, ECJ 1976:455), Article 119 was attributed a double aim, ‘which is at once economic and social’, and was said to form ‘part of the foundations of the Community’ (ibid.: no. 12). The principle of equal pay may thus be relied on before the national courts that have a duty to ensure the protection of the rights which that provision vests in individuals. The fact that Article 119 extends to collective agreements and contracts between individuals came as a surprise even to the EC Commission (Landau 1985:25). The scope of the equal pay principle was extended beyond identical work in the same establishment. In terms of the ‘spill-over’ terminology, we may therefore consider this decision in the Defrenne case55 as a functional as well as a political spill-over. None of the governments had in 1957 imagined that twenty years later, national law and individual work contracts might be invalidated by legal complaints under Article 119, EECT. It was actually in anticipation of this Defrenne decision that the Council started legislating in the area—despite the unanimity requirement. The first Directive was adopted in 1975, on equal pay for work of equal value.56 Only one year later, equal treatment of the sexes was extended to all

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employment conditions.57 In 1979, statutory schemes of social security were included in the realm of non-discrimination.58 After a long pause, two further Directives were passed in 1986 which are, however, of less significance than the earlier ones. They concern the implementation of the principle of equal treatment for men and women in occupational social security schemes59 and in self-employed activities.60 In the absence of a direct mandate for Community action, the relevant legal bases for all equal treatment Directives were Article 100, EECT and/or Article 235, EECT. In the field of health and safety of workers, the member states steadily extended their collaboration despite the absence of an explicit Community competence and despite the fact that unanimous approval was required under the subsidiary competence provisions of the Rome EECT. When QMV was introduced in the mid-1980s, a significant number of issues relating to worker health and safety were already decided under the market-oriented subsidiary competence provision of Article 100, EECT. In fact, the EEC institutions ‘have permanently expanded their competence in the field of industrial safety’ (Schnorr and Egger 1990:82; see in detail Eichener and Voelzkow 1994c). Regulated issues include protection of workers exposed to emissions and loads as well as protection against risks of chemical, physical, and biological agents at work (e.g. lead or asbestos). The requirements of the Common Market reportedly made Community action necessary in the perception of relevant policy-makers (see Schulz 1996:18ff.), far beyond those issues whose harmonisation was considered adequate when the Rome Treaties were signed (for details see e.g. James 1993). Thus, functional spill-over occurred even before political spill-over brought about QMV in the SEA. Also in the area of labour law, the EECT included no explicit competence to harmonise national provisions. Nevertheless, a number of Directives were adopted during the 1970s, under the subsidiary competence provision of Article 100, EECT. This points to the Commission’s and the Council’s perception that differences in specific labour law standards were, already in the 1970s, harming the level playing field for economic actors. Thus, minimum provisions were introduced without impact on more far-reaching national rules. Functional spill-over concerned in particular worker information in cases of collective redundancy,61 transfer of undertakings62 or employer insolvency.63 After the SEA had set up the Internal Market Programme, harmonisation measures in the realm of labour law included the protection of pregnant and breastfeeding workers,64 of young workers,65 and of posted workers who work in other member states under the freedom to provide services (e.g. in the construction sector).66 Further Directives established the employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship,67 and minimum periods of daily rest, weekly rest and annual leave in the so-called Working

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Time Directive.68 That most of these laws were passed against the fierce opposition of the UK proves that by the 1990s, a single EC government was in fact no longer able to prevent unwanted EC labour law from becoming binding on its territory. What made spill-over to social policy occur in such a significant amount of issue areas, especially in the late 1980s and 1990s? As outlined in Chapter 1, ‘spill-over’ is not granted here the status of economic ‘necessity’ or automatism. By contrast, it is perceived as a political process based on changes in preference of the major actors (notably the governments). Facilitating forces which work in favour of spill-over may be functional interdependencies, institutional activism, and ideational aspects via learning processes. So what was the specific interplay of ideas, interests, and institutions that occurred in EC social policy, especially during the realisation of the Internal Market Programme? 2.1.3 A dynamic perspective on pre-Maastricht EC social policy: between spill-over and stalemate What cannot be questioned is that the putting into effect of the Single European Act has unleashed a veritable avalanche of interdependencies between issue arenas, Eurocratic initiatives, shifts in interest association activity, redefinitions of Community authority, mobilization of subnational actors, and further expansions of the functional agenda—culminating in the Maastricht Agreements of December 1991. It may not have been produced as a neat spill-over motivated by the externalities of closely linked policies and unevenly distributed benefits and promoted by a joint conspiracy of European civil servants and interest groups that outwitted the entrenched interests of national governments and state bureaucracies, but it has demonstrated ex post that, as Ernst Haas (1976) put it, neo-functionalism may have been obsolescent but it was not obsolete. (Schmitter 1996a:9)

During the first fifteen years, EEC politics concentrated on the realisation of the central goals formulated in the Treaties. Therefore, social policy consisted almost exclusively in securing the free movement of workers and was rather non-controversial. During the late 1960s, however, the political climate changed. At the December 1969 Hague Summit, the Heads of State and Government spoke for the first time about progressively setting up an economic and monetary union. In that context, a reform of the European Social Fund was deemed opportune ‘in the frame of a close concertation of social policies’ (paragraph 12 of summit declaration quoted in Rifflet 1989: 12, author’s translation). The suggestion by the 1970 Werner report on economic and

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monetary union that the reduction of regional and social disparities should be fought by EC policies was taken up by the Commission which increasingly stressed the importance of social policy activism (see Rifflet 1989:16ff.). At their 1972 Paris Summit, the EC Heads of State and Government solemnly declared that economic expansion should not be an end in itself but should lead to improvements in the living and working conditions of the populace. With a view to relevant EC action, they agreed that a catalogue of social policy measures should be elaborated by the Commission. In the resulting social action programme of 1974 (OJ 74/C 13/1), the Council expressed its intention to adopt a series of social policy measures within two years.69 It was a significant policy shift that the Council stated that EC social policy should furthermore be conducted under Article 235 of the EECT which goes beyond purely economic considerations in the narrow sense (it refers to the general objectives of the Treaty; see above). This was the unequivocal expression that the governments now perceived social policy intervention as an inherent dimension of their integration enterprise. Thus, the EEC Treaty’s subsidiary competence provisions were increasingly interpreted in a regulation-friendly manner in the process of day-to-day policy-making. Originally, only matters which directly affected the Common Market such as outlined in the Treaty had been perceived to qualify for the approximation of national social policies by the Community under Article 100. During the 1970s, a shift occurred. Now EEC regulation was already considered legitimate if it only facilitated the practice of the free movement of production factors (see e.g. Beutler et al. 1987:438). Most of the proposed legislative measures as well as programmes were actually adopted by the Council up to the early 1980s (e.g. on equal treatment in the workplace; labour law minimum standards such as early warning in cases of mass redundancies; on details see above and Hantrais 1995; Gold 1993). That the decision process was more cumbersome and lengthy than initially planned is usually seen as a consequence of the worsening economic conditions soon after the social action programme had been adopted (see e.g. Betten 1989). The Internal Market Programme prompted renewed controversies on EC social policy. As early as 1985, the Commission stated in its annual working programme that the realisation of an enlarged market should go hand in hand with a European social area, if social dumping with a negative effect on overall employment was to be prevented (EC Bulletin Supplement 4/ 1985). Nevertheless, the Commission White Paper on the Internal Market Programme did not include a social policy chapter. Reportedly, the unanimous approval of all governments was only achieved under this condition (e.g. Köpke 1988:48). As outlined above, the only relevant social

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policy innovation of the SEA was in the market-related area of health and safety of workers. But several actors (the ‘pro-harmonisation coalition’) would not stop urging that the European market should be accompanied by social and labour law measures: national and European trade unions, the (majority of the) EP, the Commission as a collegiate body,70 (a majority of the) ECOSOC—to name just a few. In its working programme of 1986, the Commission formulated that only minimal harmonisation of certain working conditions could prevent distortions of competition which might otherwise harm the functioning of the enlarged market (EC Bulletin 1/ 1986:10ff.). In 1988, the Commission published several discussion documents on what was called the ‘social dimension of the Internal Market’. It urged for a reflection on Euro-level labour relations, a deepening of the social dialogue, and a codex of social minimal standards (see e.g. Social Europe, 1988/1:74). The Commission had hoped that the European Council of Hanover in June 1988 would adopt a declaration on the ‘social dimension’— but the Commission President still failed to convince the twelve Heads of State and Government that ‘the social dimension is an integral part, even a precondition for the successful construction of Europe’ (Delors 1988:17). However, the conclusions of the German Presidency stressed ‘the importance of social aspects for the progressing realization of the goals set for 1992’ (see EC Bulletin, 1988/6:187, author’s translation). Increased measures to improve health and safety in the workplace were asked for—an apparent allusion to the ‘Treaty-base game’ (M.Rhodes 1995a:99), i.e. the tactic to widely interpret Article 118a, EECT in order to allow for decisions by a qualified majority in social policy.71 This seems to have made some delegations disagree with what the German delegation had proposed as a joint declaration. The following summit of Rhodos in December 1988 continued along these lines (see EC Bulletin, 1988/12:9ff.). The Presidency’s conclusions mention that progress in implementing the SEA should go along with parallel progress in implementing the social policy provisions, notably Article 118a and b. The Internal Market should not be seen as a goal in itself, rather, prosperity for all in the tradition of social progress should be the aim. The then ongoing Commission study on working conditions72 as invited by the previous European Council was mentioned by the Greek Presidency in the context of implementation of social rights: Commission proposals were expected by the Council and should be guided by the Social Charter of the Council of Europe. The Commission had meanwhile continued conceptual work in the social policy realm. On 30 May 1989, it finally suggested to the Council it should adopt a ‘Community Charter of Social Rights’ (COM[89] 248 final). Against the hopes of the trade unions, the EP, and some

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governments (notably the French), the legal form of the proposed Charter was only a non-binding ‘solemn declaration’. The Madrid European Council of June 1989 postponed the adoption of the Charter because the British opposed it in principle and the other delegations disagreed on various details. At least, the Madrid summit’s Presidency’s conclusions, which were—as an exception—adopted unanimously by all member states (see EC Bulletin, 1989/6:8) stated for the first time that social matters should be attributed the same importance as economic questions in the realisation of the Internal Market, and that both should be developed in a balanced manner (see the general considerations of the Social Charter; Schulz 1996:21). Reportedly, the ‘framing’ of social policy within the summit’s discussions was in connection with the implementation of all aspects of the SEA, especially the realisation of the Internal Market (EC Bulletin, 1989/6:8). Progress under Article 118a, EECT (health and safety, see above) was explicitly welcomed. After months of controversial discussions, a weakened version of the Commission proposal on a Social Charter was adopted in December 1989— by all the EC governments except the UK. It explicitly mentions that the implementation of the Charter must not lead to a broadening of the competences of the Community such as provided for in the Treaty.73 At best, the Social Charter is therefore ‘a statement of principles’ (Lange 1993:7) on rights which workers (i.e. not all citizens of the Union) should possess—in accordance with existing practice and varying situations in the member states, which are attributed a pivotal role throughout the document. In a political rather than a legal sense, the Social Charter nevertheless marks a turning point in European social policy. The eleven Heads of State and Government explicitly declared that the Internal Market in their view necessitates labour law intervention at the EC level: ‘The completion of the internal market must lead to an improvement in the living and working conditions of workers in the European Community. This process must result from an approximation of these conditions while the improvement is being maintained, as regards in particular the duration and organisation of working time and forms of employment other than open-ended contracts, such as fixed-term contracts, part-time working, temporary work and seasonal work. Every worker in the European Community shall have a right to a weekly rest period and to annual paid leave, the duration of which must be progressively harmonised in accordance with national practices. (points 7 and 8, Community Charter of fundamental social rights of workers)

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This indicates that eleven out of twelve governments did indeed change their minds with a view to the need for European labour law in the Internal Market between 1986 (when the SEA was signed) and the European Council of Strasbourg in December 1989. The Presidency conclusions of the Strasbourg Summit explain that the Charter was being adopted as a basis for a stronger social dimension in the future, and that it expressed the focus on a joint tradition of a social model (EC Bulletin, 1989/12:11). This made explicit a shift with a view to the framing of social policy which had originally been seen as a matter of almost exclusively national concern. By the late 1980s, the ‘social dimension’ of European integration and the need for common action in favour of the ‘European social model’ (see section 2.3) became a constant theme even at the highest Euro-level, i.e. the European Council. The Commission presented an action programme on the implementation of the Social Charter to the governments of which the Strasbourg Summit took note. In its Communication, the Commission explains that it ‘limited its proposals for directives or regulations to those areas where Community legislation seems necessary to achieve the social dimension of the internal market and more generally, to contribute to the economic and social cohesion of the Community’ (COM[89] 568 final: pt 5). Among the proposed measures (formally adopted by the Commission between June 1990 and August 1991) were several binding EC Directives in the area of labour law which represented the central goals of the action programme (see Ross 1995b:376). They mostly envisaged minimum standards without impeding more ambitious national rules. According to their content, the measures fall in two groups. Group I concerns developments which are in direct relation to the Internal Market. The best example is the question of which national labour regulation should apply if workers are sent to work in another member state under the free movement of services (‘posted workers’): should Portuguese construction workers on German sites be paid according to Portuguese standards only? If so, the German system suffers from significant competitive disadvantages, and workers at the same site would be treated differently because of their nationality—which does not seem ‘European’, indeed. Another example of a direct effect of the Internal Market on social policy in the wider sense is that with increased Europeanisation, the national laws on worker information and consultation become de facto void of substance: transnational enterprises avoid coming under their jurisdiction because they take important decisions outside the national realm. Therefore, only European Works Councils can guarantee that the status quo ante of worker consultation is being upheld in the enlarged European market. Group II measures under the 1989 Commission social action programme, by contrast, relate only indirectly to the Internal Market. They concern labour

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law standards applicable e.g. for young or pregnant workers; rules on written employment contracts for all employees; or rules relating to working time. In principle, these matters concern enterprises whose activities do not extend beyond the nation-state as much as transnationals. Nevertheless, such standards are not left untouched by economic integration. They are indirectly concerned because the competitive pressures increase and national differences gain in weight when capital is free to exit. On grounds of such less immediate but nevertheless perceivable effects, one may advocate Europe-wide minimum standards also in ‘Group II issues’, in order to create a more level playing field for economic operators. At least the measures mentioned under the second group in the 1989 social action programme go beyond market-making in the strict sense and represent market correction. From a neoliberal view, 74 even the first group might look overly interventionist and might interfere with the ‘pure’ market forces. On this understanding, Streeck’s (e.g. 1995b:113) reproach that EC social policy is purely market-making seems only justified for quite early periods of European integration. In fact, dissent over which social policies belong to the EC market-making process was exactly the point of disagreement between different schools of thought, since the beginning of European integration. The fact that, increasingly, a wider interpretation was being accepted by the Council members is a significant development which needs explanation. The following overview (see Table 2.1) reveals that the Commission (with strong backing by the EP and some governments) increasingly advocated that both groups of measures should be part of the ‘social dimension’ of European integration. Relevant legislative proposals were introduced, partly in a ‘Treaty-base game’, i.e. using an extensive interpretation of Article 118a of the EECT. By the end of the IGC on political union in December 1991, only two of the above-mentioned legislative proposals had been adopted in the Council. They were undisputed but of comparatively minor significance: a small and not disputed part of the three atypical work provisions (i.e. on health and safety for part-time workers), and the Directive on workers’ right to an explicit employment contract (without the contents of such contracts being touched). All other draft law was blocked in the Council, mostly by the UK. The same was true for several measures which had already been presented before the 1989 action programme (e.g. on parental leave, on the burden of proof in sex discrimination cases, on more far-reaching equal treatment of the sexes in social security). In December 1991, Jacques Delors admitted that ‘two years of the Social Charter had not resulted in the approval of one single important text’ (quoted in Clark and Hall 1992:106).

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Table 2.1 Innovative regulative action under the 1989 social action programmea

Notes a Outside health and safety in the narrow sense, except changes to older Directives (for a complete overview of all projects see e.g. COM[91] 551 final). b ‘Not pro’ refers to abstentions as well as votes against (source: media reports and interviews). However: abstentions are mostly a tactical move when governments know that they would in any case be outvoted. The distinction is thus hard to make—and even more so because formal votes rarely take place in the EC Council. In some cases there are indicators that more governments were possibly in fact ‘not pro’ but preferred to keep this within ‘Council secrecy’. The Greek Foreign Minister stated after the adoption of the Common Position on young workers: ‘there was no vote, nor was there a unanimous decision’ (quoted in Europe, 21 April 1994:12).

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2.2 The European ‘social partners’ prior to the Maastricht Treaty The ‘social dimension’ of European integration seems as much a politycreating process as a law-making one. Hand in hand with the incremental development of social policies, new forums were created and new actors were induced to participate in the Euro-level policy process. 2.2.1 The process of polity creation It is important to note that until the 1990s the organised interests of labour and industry had not been given a special role in the social realm. The Economic and Social Committee (ECOSOC) which includes nationally nominated representatives of the employers, the workers, and various other interests, had a consultative function such as in many other areas of European integration. It was only involved in the decision-making process by delivering non-binding ‘reasoned opinions’ on policy proposals.75 Up to the Maastricht Treaty, the constellation of actors in EC social policy was therefore no different from other functional realms. The Council was the sole (and after the SEA, for the area of worker health and safety, the prime76) legislator, and there was a strict boundary between public and private actors in decision-taking. Parallel to the incremental development of a ‘social dimension’ of European integration from the early 1970s onwards, a social policy network emerged at the EC level. It included—apart from members of the EC institutions—also private interests and specialised agencies. This process was actively promoted by the European Commission and often formalised by the Council. A major incentive was to broaden expertise. It seemed useful to extend the array of special interests open for consultation. The ECOSOC, which had been the only element of public-private interplay provided for under the Rome Treaty, did not work quite satisfactorily (see e.g. Lodge and Herman 1980:284; Streeck and Schmitter 1991:202ff.; Gorges 1996:34ff.). Its low political impact is mainly due to the ideological split between ECOSOC’s three parties (employers, employees, and various interests) which has, in many cases, deprived the Committee of a good basis for compromise. In practice, this has meant that the results of cumbersome decision-making processes have lacked coherence and/or any definitive status (for a case study see e.g. Falkner 1991 on the so-called ‘EC Social Charter’). The widening of the actor constellation in EC social policy therefore seemed a promising enterprise to the Commission, especially when economic and monetary union was discussed for the first time in the late 1960s. The conclusions of the 1970 Werner Report on economic and

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monetary union suggested that management and labour should be consulted before Community policies were developed. In order to prevent excessive disparities, the development of incomes in the various member states should be discussed at the Community level, with the participation of the social partners (see Rifflet 1989:13). The Commission’s proposal to the Council on the establishment of economic and monetary union (COM[70] 1250) insisted on the importance of concertation of the economic policy orientations with the social partners (see Rifflet 1989:14). When these early efforts towards monetary union failed, the calls for an increased social partnership nevertheless continued. In 1970, the Standing Committee on Employment was established by a Council decision. It consisted of the national Social and Labour Ministers, representatives of national employers’ and employees’ federations as well as representatives of Directorate General V of the EC Commission. It issues opinions and consults the Commission on employment-related topics. But again, the process proved too cumbersome to be effective (for details see Gorges 1996:120ff.). At the EC Paris Summit in 1972, the Heads of State and Government considered an EC social policy and the further increased participation of the social partners to be indispensable on the way towards economic and monetary union. In the 1974 social action programme (OJ 74/C 13/1), the Council mentioned as one of the central goals (in addition to full employment and the improvement of the living and working conditions) a growing participation of the social partners in the economic and social policy decisions of the Community.77 To realise this aim,78 the Council announced the reinforced involvement of the Standing Committee on Employment in all matters related to employment. It furthermore indicated its support of those employee representations that participate in the activity of the Community by establishing a European Trade Union Institute (ETUI)79 and training and information units for European matters. This was an important signal to the European Trade Union Confederation (ETUC) which had only been founded in 1973. The Council furthermore planned to facilitate, on the basis of the circumstances in the single member states, the conclusion of European collective pay agreements in appropriate areas. This pledge, as early as 1974, shows that invitations to the social partners to conclude Euro-level agreements actually have a long history. In the aftermath of the 1974 social action programme, a tripartite discussion forum on social policy and employment issues was established, consisting of the EC Council and Commission, as well as of representatives of labour and industry. Euro-level representatives of labour and industry were for the first time invited to participate, next to national social partners. These ‘Tripartite Conferences’ met six times up to 1978, debating issues such as full employment, inflation and fiscal policy. At that point, the ETUC

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withdrew due to the reluctance of the employers’ side to conclude agreements (see e.g. Gorges 1996:130). By then, the employers did not have to fear any negative consequences from this because the Euro-level organisation of trade unions was only in its beginnings and incapable of significant collective action. Furthermore, the Council’s social policy impetus of the early 1970s had already stalled, and many important legislative projects stayed blocked. Obviously, manifold efforts to bring about a more effective public-private interaction in EC social policy-making were a failure up to 1985 at least. Comparatively successful, however, was the strategy to include social partner organisations on the boards of various agencies such as the European Foundation for the Improvement of Living and Working Conditions, and the Centre Européen de Formation Professionelle (CEDEFOP). Both were established under the 1974 social action programme and still provide expertise for the EC institutions within their functional fields. Many social partner and Commission experts acknowledge that co-operative experiences in such arenas actually increased confidence and allowed communicative patterns to build up between management and labour which facilitated the development of ‘social dialogue’ later on. A new era of attempts towards co-operative governance began when Jacques Delors took office as the Commission President in January 1985. He had a wellknown personal history of trade union leadership and held a strong conviction in favour of social dialogue (e.g. Roethig 1995:278)—as did his major collaborators.80 Delors and his team launched the so-called ‘social dialogue’ between the EC level top strata of labour and industry (ETUC, UNICE and CEEP; see section 5.1) at the Val Duchesse castle outside Brussels. The original Commission plan was to establish shared views which would subsequently be discussed with the two sides of industry in each member state, which should in turn lead to new topics being discussed at Community level, again with a view to reaching agreement (see COM [89] 568 final). In fact, the results of the social dialogue were hoped to circumvent or break social policy stalemates in the Council which were a frequent phenomenon up to the Maastricht Treaty. For example, Commission Vice-President Manuel Marin’s ‘guidelines on the development of the Community’s social policy’ (Europe, Document no. 1498 of 19 March 1988) stated that activities in the framework of the social dialogue regarding flexibility and adaptability of work in the enterprises ‘if they are reflected in positive conclusions—may allow a new approach as to the draft Directives still pending at Council level, such as the Directives on part-time work and on employment contracts of definite duration’ (no. 18). Because the employers refused to enter any binding agreements, however, only a few non-binding joint opinions were published up to the early 1990s. In the short run, the ‘Val Duchesse social dialogue’ thus proved a failure when compared with Delors’ ambitions.

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With the ‘Europe 1992’ project, Delors successfully launched marketmaking EEC reforms. Despite its strictly limited substantive social policy changes (see section 2.1), the 1986 Single Act gave the Commission President formal backing for the Val Duchesse social dialogue: the possibility of Euro-level collective agreements was explicitly mentioned; and the Commission was solemnly given the task of endeavouring to develop the dialogue between management and labour at European level (see Article 118b, EECT). Parallel to the practical implementation of the Internal Market, the lack of a ‘social dimension’ was increasingly being politicised. Actors such as the EP, the ETUC, and the Commission argued that open economic borders create a need for EC action to prevent ‘social dumping’ (see Falkner 1993b). In a 1988 discussion document on what was called the ‘social dimension of the Internal Market’, the Commission again urged for a reflection on Euro-level labour relations and on a deepening of the social dialogue (see e.g. Social Europe 1988/1:74). Its hope was still that the social dialogue would prompt a consensus among the social partners which might lead to specific proposals for Community action (see Working Document on the social dimension of the Internal Market, SEC[88] 1148, no. 59). Social partner agreements were considered essential in order to give such proposals at least some chance of being adopted (ibid.: no. 64). In fact, the Commission was at the time faced with low ambitions in the Val Duchesse social dialogue. Nevertheless, it announced in public its intention ‘to continue to play its stimulating role while fully respecting the social partners’ own willingness, though not disregarding the Commission’s obligations and its prerogatives under the Treaty or the Single Act’ (see Commission Vice-President Manuel Marin’s ‘guidelines on the development of the Community’s social policy’; Europe, Document no. 1498 of 19 March 1988, no. 23). We can see that, despite quite unfavourable starting conditions, the Delors Commission would strongly pursue its idea that the involvement of management and labour might help unblock the EC’s social dimension. Social dialogue would constantly be marketed in official documents and brought up in meetings and conferences. It seems that a learning and even an identity formation process was being induced. There was much talk of backing the ‘European social model’ by a social dimension to the Internal Market, based on both joint social minimum standards (see section 2.1) and social dialogue between labour and industry. By the late 1980s, in the Presidency conclusions, even European Council meetings would refer not only to social policy in general, but to the involvement of the social partners, in particular. The Hanover Council of June 1988 invited the Commission to intensify its dialogue with the social

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partners, and the summit of Rhodes in December 1988 stated that progress in implementing the SEA should go along with parallel progress in implementing the social policy provisions, notably Article 118b on the social dialogue (see EC Bulletin, 1988/12:9ff.). A significant symbolic step in the development of EC social policy was the so-called ‘Social Charter’ which solemnly declared a series of basic rights of workers, related to free movement, working conditions, and social security. As far as implementation came under the framework of EC competences, it was perceived to ‘need the active participation of the social partners in many areas’ (Preamble). The Charter’s title on the right to freedom of association and collective bargaining (points 14–16) mentioned that the dialogue between social partners at European level was to be strengthened. This could lead to contractual relations if the social partners so wished.81 In its Communication concerning a working programme aimed at implementing the Charter (COM[89] 568 final), the Commission presented for the first time proposals on social partner involvement similar to the 1992 Maastricht Treaty. It wanted, together with the two sides of industry, to ‘examine the extent to which and under what terms the former could agree to participate, in the framework of the social dialogue, in preparing certain legal instruments which the Commission would subsequently submit to the Community bodies concerned’, and it proposed to consult systematically the two sides of industry on proposals to which reference was made in the action programme (ibid.: 29, emphasis added). The employers had traditionally rejected both EC level social regulation and EC level negotiations with labour (see in more detail see sections 2.2.2 and 5.1). It was thus no surprise that UNICE voiced concerns about the volume of initiatives proposed and the thrust of some of the proposals in the 1989 social action programme (see position paper of 22 March 1990). Nevertheless, the Commission’s tactic to employ ‘sticks’ as well as ‘carrots’ (i.e. to envisage social regulation but provide for possible participation of the social partners in its elaboration; see Ross 1995b:377) was successful: UNICE made it clear that despite its opposition to most EC level legislation, it wanted to have a say in the details of any measures discussed. UNICE requests that it should be properly consulted before the final detail of an initiative is decided by the Commission, as well as on formal proposals to Council…. In some cases, it may be appropriate for the social partners to have an opportunity to debate the issues involved in the social dialogue at an early stage, prior to the Commission adopting a formal proposal. However, this should not replace or delay direct consultation of UNICE by the Commission. (UNICE position paper of 22 March 1990; emphasis added)

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If UNICE warned at the same time that ‘too much regulation and central control will stifle initiative, demotivate the social partners’ (ibid.), the further developments with a view to the Maastricht Treaty showed the contrary. Euro-level interest politics developed alongside with the increased ‘state’ capacity of the EC in social policy. Only when there was a realistic threat that the 1989 social action programme’s proposed Directives would indeed be passed by the Council (i.e. during the IGC 1990–91), however, did the step out of the ‘decision gap’ on the part of labour and management finally occurr. 2.2.2 The corporatist decision gap In various EC member states, social policy is a realm of intense publicprivate co-operation and partly even of corporatist joint decision-taking. By contrast, the relevant European venue was until the 1990s characterised by a multitude of purely consultative bodies and a multitude of lobbies acting individually. In so far as the Commission (and occasionally the other EC institutions) would only individually consult various Euro-groups, according to topic and convenience, not even ‘issue networks’ (see section 1.2.2) would necessarily emerge on specific policy projects. As opposed to the two-dimensional corporatist ideal-type as presented in section 1.2.1.1, the pre-1991 situation of EC social policy looked quite pluralist, indeed (see Figure 2.1).

Figure 2.1 Pre-1991 group set-up and decision patterns in EC social policy in terms of the old pluralism versus corporatism concept

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As outlined above, the EC Commission and increasingly also the Council were encouraging the major economic interests to enter into contractual relations between themselves, and to help elaborating EC social regulation. This was, however, not welcomed by the employers who were only willing to lobby and to be consulted. They were comparatively less enthusiastic to participate in the Val Duchesse social dialogue. The negotiation of binding agreements, in turn, was rejected for almost forty years of European integration. Building on Fritz Scharpf’s joint-decision trap, Wolfgang Streeck has recently enriched the conceptual tool-kit of European integration research by pointing to this ‘decision gap’ at the level of organised interests. The weakness of social policy at the European level is, according to Streeck, as much a consequence of the balance of power between labour and capital as a result of the member states’ sovereignty considerations (Streeck 1995b:110). Hence, what Scharpf recommended in his piece on ‘community and autonomy’ as a form of regulation which is rather heedful of national and subnational autonomy, i.e. ‘to take the greatest possible advantage of corporatist…processes of norm formation, concretization and enforcement’ (Scharpf 1994:236), is deemed unrealistic. Streeck assumes that for capital (as opposed to labour), the deficiencies of the ‘joint-decision trap’ in European social policy represent an advantage because its class interest is nonintervention. If any single member state efficiently blocks social regulation, the ‘strategic silence’ of UNICE in combination with effective lobbying of the most reluctant governments serves its interests best. Streeck’s diagnosis is a persistent ‘policy of the empty chair’ at the level of corporatist transnational politics (ibid.: 117), an endemic decision gap in the EU system of interest politics. The above section has indicated that this state of affairs was indeed present up to the Maastricht Treaty. In the following chapters of this book, however, contending evidence will be presented for the post-1990 period. 2.3 Synopsis: the ‘social dimension’ before Maastricht Chapter 2 has outlined the incremental development of EC social policy from its origins in the 1950s up to the early 1990s. Despite a meagre Treaty basis, a significant extent of spill-over occurred (although often only partial and/or delayed; see also section 6.3). The Commission did not restrict itself to the ‘policing’ of the integrated market but actively promoted social policy harmonisation. Despite support from other actors, notably the EP, its success was selective. Significantly, the Commission was without success pressing for a parallel social policy dimension when the Internal Market Programme was drafted. Only in the years following the SEA, the perception of the great

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majority of Council delegations shifted in favour of more EC social and labour law regulation. Although the 1989 Social Charter failed to establish in a legally enforceable way, basic social rights in the Internal Market, it marked a political touchstone: the governments (except the UK) confirmed the need for a ‘social dimension’ of European integration. The notion of a European social model as a generally accepted reference point was, on the one hand, artificial: the systems of social welfare and of labour relations in the EC member states (both are generally considered the major pillars of the European social model) are in fact quite diverse. On the other hand, however, the differences are put in perspective if the EC member states are compared to other regional blocs in the world. Therefore, ‘[o]ur European social model’ is perceived to ‘differentiate us from all other societies’ (ETUC Secretary-General Gabaglio, quoted in Europe, 8 November 1996: no. 21). Indeed, all EC member states can be said to be developed welfare states. And—again despite all differences in the details—the existence of some form of ‘social dialogue’, i.e. of more or less formalised institutions with the aim of seeking consensus between management and labour, is another distinctive feature of the member states (see e.g. Visser 1997:5). The Commission’s view that selective EC action is necessary in order to preserve and develop this European social model was confirmed in 1989 by the overwhelming majority of the governments. The ‘shared values which form the basis of the European social model’ (including ‘democracy and individual rights, free collective bargaining, the market economy, equality of opportunity for all and social welfare and solidarity’) are said to have been ‘encapsulated by the Community Charter of the Fundamental Social Rights of Workers’ (Commission White Paper on European Social Policy, COM[94] 333: pt A.3). In addition to financial support and the promotion of transnational cooperation, the Commission promotes legislation, and collective agreements, in favour of the European social model (e.g. ibid.: pt. C.21ff.). Both instruments for EC level action should not over-stretch economically weaker member states or prevent richer states from implementing higher standards, but provide a bulwark against using low social standards as an instrument of unfair competition (ibid.). In short, common social minimum standards and social dialogue represent the crucial pillars of the EC’s social dimension as envisaged in the Social Charter action programme and, later, in the Maastricht Treaty (see also M.Rhodes 1995a:80). Faced with a far-reaching unanimity requirement in the EECT, however, the eleven governments’ impetus to set up a social dimension of the Internal Market found hostile framework conditions. The social dialogue, in turn, was stuck in the corporatist decision gap. Therefore, a Treaty reform seemed necessary to the overwhelming majority of Council delegations, by the time of the 1990– 91 IGC.

3

Social policy in the Maastricht Treaty

While the convention of an intergovernmental conference on economic and monetary union had already been decided in December 1989, the more controversial decision to convene a similar forum for constitutional EC reform with a view to various aspects of European political union (the UK and Portugal had initially been against) was only taken at the June 1990 European Council of Dublin. Although the prime objective of the IGCs opened on 14 December 1990 in Rome was nevertheless economic and monetary union, negotiations on how to reach political union were held in parallel. The term ‘political union’ referred to a bundle of topics, stretching from procedural reform (mainly strengthening the EP’s legislative powers; see Falkner and Nentwich 1992) to substantive policy innovation. Social policy was a major issue within the latter. The historical context of this reform has already been presented above (see Chapter 2). In this chapter, the social policy innovations of the Maastricht Treaty will be analysed both with a view to their substantive (see section 3.1.1) and their procedural aspects (see section 3.1.2). Section 3.2 will then tackle the tricky question why the Maastricht social policy innovations were accepted by the EC governments. 3.1 The Maastricht innovations The intergovernmental conference preceding the Maastricht Treaty negotiated a reform of the social policy chapter in the EECT. However, due to the requirement of unanimous approval by all twelve member states the social provisions could not be significantly altered in the presence of strong opposition from Great Britain under the Tory government. At the end of most difficult negotiations which had even threatened the rest of the IGC’s compromises, the UK was granted an opt-out from the social policy measures agreed by the rest of the member states. In the Protocol on Social Policy annexed to the ECT,82 all the eleven (after 1995: fourteen) member 78

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states except the UK were authorised to have recourse to the institutions, procedures and mechanisms of the Treaty for the purposes of implementing their ‘Agreement on Social Policy’. During the initial phase after the Maastricht negotiations only one point seemed undisputed: the lack of coherence in the Treaty on European Union, including specifically its social provisions (e.g. Weiss 1992:3; Fitzpatrick 1992:203; see Assicredito 1995) and their very poor wording (e.g. Watson 1993a:492ff.). Consequently, it did not come as a surprise that diverse and even contradictory interpretations of the status of the Social Agreement were proffered by legal scholars. Furthermore (and partly as a consequence of this), the internal functioning of the EC institutions was questioned. The well-known Belgian EC specialist Eliane Vogel-Polsky has argued that the Social Agreement was not part of the Protocol on Social Policy (to which it was annexed) and thus not part of the corpus of EC law.83 As a mere intergovernmental agreement, it should in this perspective have been ratified by the relevant national parliaments (Vogel-Polsky 1994). In the absence of such national ratification, the political will of the eleven governments to progress in the social area was stuck in a legal deadlock, ‘une impasse juridique rendant impossible le développement d’une politique sociale communautaire’ (Vogel-Polsky 1994:86). Not only would any action by EC institutions be completely voluntary and the ECJ would not be empowered to take a ruling on it, but also, any measure adopted on this legal base would need ratification by national parliaments in order to become effective. It would otherwise be void (see also Leibfried and Pierson 1992:344). Most EC lawyers, by contrast, did not question so fundamentally the legal status of the Social Agreement (see e.g. Watson 1993a; Séché 1993; Hailbronner 1994; Bercusson 1994a, b). They acknowledged that some questions had been raised concerning the principle of unity of Community law, but argued that the wording of the relevant provisions meant that the Social Agreement was an inherent part of the Social Protocol and therefore (by virtue of Article 239) part of the Treaty. Notions like ‘Community action’ or ‘at a Community level’ they argued, showed clearly that the signatories considered that social deliberations by the eleven (now fourteen) member states, except for the UK, were taken in a Community capacity. From this it followed that the relevant governments and the EC institutions had retained their traditional powers and duties with regard to social provisions based on the Social Agreement; even the judicial principles of primacy and direct effect applied. In 1997, the Treaty of Amsterdam aims to introduce the Social Agreement into the ECT, without significant substantive changes. Even before this

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reform enters into legal force, the new UK Labour government is already participating in the Social Council deliberations under the Social Agreement.84 Therefore, no authoritative decision on the scholarly debate regarding the legal character of the Social Agreement is now expected. The study of the practice under the Social Agreement, in any case, suggests unequivocally that the EU polity accommodated the second, more ‘integrationist’ interpretation (see Falkner 1996c). When answering relevant parliamentary questions, both the Commission and the Council stated that measures adopted under the Social Agreement were EC law for the signatory states (see OJ 92/C 289/20; 93/C 40/12; 93/C 95/17). In its Communication on the application of the Social Agreement (COM [93] 600 final), the Commission explicitly stated that the Agreement was ‘soundly based in law’ and that the ‘Community nature of measures taken under the Agreement is beyond doubt’ (point 7). Crucially, various legal acts were decided and implemented under the Agreement (see below). All the EC institutions operated on the basis of ‘business as usual’, fulfilling the duties imposed by the new legal basis in the same way as they would have on a traditional ECT basis. The UK’s opt-out from the social policy measures agreed by the rest of the member states under the Social Agreement was without precedent in EU history. Accordingly, the new arrangement caused legal as well as political questions regarding the participation of UK members within the EC institutions. The text of the Protocol on Social Policy only clarified that the UK ‘shall not take part in the deliberations and the adoption by the Council’ of relevant Commission proposals (Article 2).85 In practice, this meant that the British remained passive but physically stayed in the meeting room during Council debates and during votes under the Social Agreement. There was considerable controversy concerning the participation of the British members of the other EC institutions (see e.g. Barnard 1992:27; Schuster 1992:182ff.; Watson 1993a:503ff.). The participation of the UK’s MEPs was most vividly contested (Hailbronner 1994:122) because they are legitimated by direct election from their own country’s, not the European, electorate. The Liberal Group in the EP in fact argued that the British should not be voting on matters which would not affect them. Nevertheless, the Plenary voted by a large majority in favour of non-discrimination of its British members (plenary session of 17–21 January 1994; see EIRR 241:3). The following section shows that despite enormous political difficulties and last minute compromises at the Maastricht Summit, a significant degree of policy innovation indeed took place for those who signed up to the Social Agreement—both in terms of the EU competence and decision modes (section 3.1.1) and in terms of public-private relations (section 3.1.2).

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3.1.1 Policy innovation Because of the UK opt-out, the European Union possessed two legal bases for the adoption of social policy measures after the Maastricht Treaty came into force in 1 November 1993.86 The EC Treaty’s social provisions stayed valid for all EU member states. As introduced by the 1986 Single Act, it allowed for minimum harmonisation as well as for QMV in the area of worker health and safety provisions only. By contrast, the innovative social policy provisions of the Social Agreement—applicable only to the EC members except Great Britain—comprised what had been perceived during the IGC as amendments to the social provisions of the EECT. They brought an extension of the Community competence in a wide range of social policy issues. These include working conditions, the information and consultation of workers, equality between men and women with regard to labour market opportunities and treatment at work (as opposed to only equal pay before), and the integration of persons excluded from the labour market (see Article 2, Social Agreement). Some issues were, however, explicitly excluded from the scope of minimum harmonisation under the Maastricht social policy provisions: pay, the right of association, the right to strike and the right to impose lock-outs (Article 2.6, Social Agreement).87 The probability of an active use of the new competences under the Social Agreement was crucially enhanced by the extension of majority voting to many more issues than before, including e.g. the information and consultation of workers. Unanimous decisions were restricted to social security and social protection of workers; protection of workers where their employment contract is terminated; representation and collective defence of the interests of workers and employers, including codetermination; conditions of employment for third-country nationals legally residing in Community territory; and financial contributions for the promotion of employment and job creation (see Article 2.3, Social Agreement). Table 3.1 suggests that the Social Agreement had ‘the potential to be a watershed in the evolution of the EC’s social policy role’ (M.Hall 1994:306). That the burden of unanimous decision-making in the Council was lifted for most aspects of EC social policy has certainly backed supranational dynamics at the expense of intergovernmentalism. It had in fact been the unanimity requirements in European social policy which ‘made both encompassing organization and centralized negotiations with labor largely dispensable for European business, whose social policy interests…tend[ed] to be realized, as it were, by default’ (Streeck and Schmitter 1991:207).

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Table 3.1 The attribution of explicit social policy competences to the European Union up to the Maastricht Treaty

Key: regulative action by qualified majority: ++; unanimity required: +; no competence: -

3.1.2 The corporatist procedures It might in the long run be as significant a procedural innovation as QMV that the Maastricht Social Agreement provided for several layers of participation in the policy process by management and labour. Thus: • The Commission now has a legal obligation to consult both sides of industry twice before submitting proposals in the social policy field— initially on the general principles and later on the details of a policy proposal (Articles 3.2 and 3.3, Social Agreement). • Management and labour may, on the occasion of such consultation, inform the Commission of their wish to initiate negotiations in order to reach a collective agreement on the matter. This would bring conventional

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EC decision-making to a stand-still for at least nine months (Article 3.4, Social Agreement).88 • Indeed, such agreements can, at the joint request of their signatories, be incorporated in a ‘Council decision’ on a proposal from the Commission (Article 4.2, Social Agreement).89 • The alternative to implementation of Euro-level collective agreements through EC law is an implementation through ‘the procedures and practices specific to management and labour and the Member States’ (Article 4.2, Social Agreement). • In any case, a member state may entrust management and labour, if they so jointly request, with the national implementation of EC Directives adopted under the Social Agreement (Article 2.4, Social Agreement).90 This had already been practised before the Maastricht Treaty. These are significant innovations because the social partners are now formal co-actors within the social policy process.91 Without their consultation, no action may be taken by the EC institutions. They may themselves implement European social policy. Furthermore, even when it comes to actually formulating specific social standards which subsequently become binding for all economic actors within the EU, the legislative institutions (i.e. mainly the EC Council, supported by the EP and acting on the initiative of the Commission) have lost their monopoly. In fact, the ‘social partners’ may decide independently on matters which may later on be accepted as formal EC social law by the Council. During each and every phase of the policy process, the social partners may therefore be the decisive actors of EC social policy since the Maastricht Treaty came into force. Only if implementation is envisaged via binding EC law are the Commission and the Council co-players in the game because they are needed to endorse the social partners’ will. Since the Maastricht Treaty came into force, EC-level collective agreements are in fact not simply one of two routes towards common social norms. They actually enjoy primacy on the path towards social legislation. There is now double subsidiarity (i.e. regional and functional92) in EC social policy (see COM[93] 600 final: pt. 6c): the general principle of subsidiarity applies to the social field, too, implying the Community shall take action only ‘if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States’ (Article 3b, ECT). Furthermore, if social policy activity is nevertheless deemed necessary at the European level, social partner agreements now have priority over legislation. Thus, the national level precedes the European one, plus the level of collective agreements is preferred to that of EC legislation. Traditional legislation is only envisaged if the social partners do not open collective negotiations, if

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the negotiations fail, or (implicitly) if an agreement’s provisions are deemed insufficient by the Commission and the Council. In short, the Maastricht innovations constituted a significant departure from the weak provisions for social partner involvement in EC policymaking during the pre-Maastricht era. 3.2 Why it was done: the origins of the Social Protocol As outlined in Chapter 1, intergovernmental conferences have been a pet topic of intergovernmentalist writing on the integration process. The Maastricht Treaty is no exception to this rule. In his well-known article on ‘Maastricht and the Social Protocol’, Peter Lange (1993) wondered: ‘Why Did They Do It?’ This is indeed a crucial question, both for understanding post-Maastricht social policy and with a view to integration theory. What are the forces that drive governments to increase Community competence and to give up veto rights’? I will briefly outline Lange’s perspective and study the member states’ actual social policy options in the IGC. The following view on the Treaty reform process pays attention to Euro-level interaction at the levels of ideas, interests, and institutions. The second part of this section is devoted to the origins of the enhanced position for labour and industry under the Social Agreement. What were the forces that drove the EC governments to entrust the so-called social partners with public policy-making? It has already been outlined in the previous chapter how the ‘social dialogue’ continuously gained in weight within Commission proposals and solemn Council declarations. On this basis, I will analyse below how the Commission skilfully exerted pressure on the social partners and how it managed to build on the identification with ‘social dialogue’ (which had already been developed since the mid-1980s) in order to have a corporatist pattern of policy-making set up under the Maastricht Treaty. As already mentioned in the introduction to this book, this would not have been possible without the substantive policy developments putting significant pressures on UNICE. 3.2.1 Who pushed for an extension of competences and of majority voting? Peter Lange tries to explain the national positions in the negotiations on the Maastricht Social Agreement from a state-centric and rationalist viewpoint, ‘based on an understanding of the governments’ preferences, which gives priority to economic interest, narrowly understood’ (1993:17). Thus he expects both parties of the Left and the Right to oppose standard raising through

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Community action if the standard expected to be produced by Community institutional change would, on average, raise costs for national employers. Under these premises, however, Portugal, Spain, Greece, and Ireland ‘could expect to be consistent losers from the change to qualified majority’ (ibid.: 17, emphasis in original). Because not all member governments had in fact reason to expect to be net gainers, Lange considers it impossible to explain the outcomes at Maastricht by looking only at the economic interests of governments (identified according to their levels of social security expenditures and their labour productivity or costs; ibid.: 15). He furthermore rejects the arguments that the agreement of those governments who should have blocked it according to their economic interest ‘was determined either by ideology or by pressure from a strong progressive trade union movement’ (ibid.: 18ff.) or by long-term economic interests of their national economies by pursuing a developmentalist strategy (ibid.: 21). Lange also discards economic transfers from the structural funds as an extra payment especially for facing increased social and labour costs, because they are ‘too large to explain agreement by the poor to the Social Protocol’ (ibid.: 24). In Lange’s brief final section he offers three reasons to his readers. The first is that after all, the Social Protocol was not important. It constituted only ‘a sideshow to the Economic and Monetary Union negotiation and a relatively less important feature of the entire set of Maastricht reforms’ (Lange 1993:27). This argument is at odds with media reports as well as insider accounts on the IGC.93 Indeed, a number of delegations turned the social policy reforms into a necessary precondition for a positive end to the whole set of Maastricht negotiations, i.e. the outcome of more than one year of intense high-level negotiations between twelve governments, on a great number of both substantive and institutional matters. Second, Lange explains that the reforms at Maastricht only ‘might appear to promise a change’ in the pattern that ‘policies in the social dimension have not been a significant output of the EC integration process’, but that to him they ‘appear unlikely to do so’ (ibid.: 27). This is a statement on the quality and potential of the Protocol which (regardless if right or wrong) cannot explain the ‘why’ of its signature. Third: in what appears the central sentence of his final section, Lange characterises the Maastricht social policy reforms as a by-product that could be accepted by the short-term losers, and paid for by the short-term winners, in the context of the achievement of far more valued goals—maintaining momentum on the entire integration process and establishing the conditions and timetable for Economic and Monetary Union. (Lange 1993:27)

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Apart from the already mentioned fact that social policy was indeed a prominent issue within the IGC, it is a problem that those countries which are seen as the losers of the Social Protocol by Lange, i.e. the poorer ones, are neither the main winners from Economic and Monetary Union nor those who most urgently wanted the latter. But what was even worse for Lange’s approach: there are no signs of a package deal involving social issues, and no signs that maintaining momentum on European integration (i.e. not making the IGC fail) in fact made any country give in to the social policy reforms (this was only hoped to be the case with the UK where it actually did not work). The countries which should actually have vetoed (according to their economic interests as indicated by Lange) did in fact themselves advocate the extension of QMV in EC social policy. That Lange’s otherwise interesting contribution falls short of explaining his initial question ‘Why did they do it?’ is mainly due to his double focus on the governments as the sole relevant actors and on national economic considerations in the narrow sense as the major independent variables in preference formation. Economic interests can at best explain why those member states with the highest social standards might have wanted to push EC social harmonisation in order to create a more level playing field for economic operators in terms of labour costs. They nevertheless leave us with a puzzle considering the positive stance of several other delegations. By contrast, I hold that both institutional activism and the joint processes of preference and identity formation at the European level mattered. They are, however, not captured by state-centric approaches to integration theory (see section 1.1). I will provide an alternative account of why the Social Protocol was signed, based on empirical evidence of the governments’ 1990–91 negotiating positions. It is well documented that the Belgian, French, German, Italian, and Danish delegations definitely wished to strengthen EC social policy in the Maastricht IGC (e.g. Ross 1995a:150). More interesting is, therefore, the position of those governments which should, according to Lange, have been against an extension of EC competences and majority voting in social policy, i.e. Greece, Portugal, Spain, and Ireland. In fact, Greece was the first member state which presented an official ‘contribution to the discussions on progress towards political union’ which included social policy provisions (on 15 May 1990; published in Laursen and Vanhoonacker 1992:277ff.). It asked for an extension of the co-operation procedure, i.e. of QMV, to all legislative acts (ibid.: Article 2.2). Under the heading ‘new common policies and action’ (ibid.: Article 6), Greece asked for an expansion of the plexus of common policies ‘by developing or strengthening policies/action in the…“social dimension”, with measures and action both to protect workers and to tackle social problems with an international dimension (drugs, alcoholism, etc.)’ (ibid.: Article 6.1).

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The Portuguese delegation should according to Lange’s economist considerations also have had no interest in the Social Protocol’s innovations. In fact, however, the Portuguese Memorandum of 30 November 1990 (published in Laursen and Vanhoonacker 1992:304ff.) wanted to extend Community action to areas of special importance to citizens, transcending the purely economic context…. Subjects such as…social questions, health, education, young people…, with regard to their European dimension, ought to be the subject of a gradual development of Community responsibilities…. The procedures to be used in these new areas should be subject to the general rule of a qualified majority and of the co-operation procedure. (ibid.: Article 1.2, emphasis added) The Spanish government also actively asked for social policy reform. A detailed Spanish proposal within the social policy negotiations in February 1991 suggested a minimum harmonisation proceeding in steps, with social action programmes to be adopted unanimously but to be implemented by qualified majority (with few exceptions, notably working time; see Schulz 1996:78). Ireland was the only one among this group of four not to present a formal proposal on how to reform EC social policy. Statements by the head of government Charles Haughey to Parliament during 1990 nevertheless underlined that the maintenance of a balance between political integration and integration in the economic and social fields was among the top priorities. Furthermore, Ireland wanted to introduce employment promotion as one of the objectives of social policy (van Wijnbergen 1992:131ff). It is interesting to note that after the European Council in Maastricht, Haughey mentioned social policy among those ‘fundamental changes’ where ‘we had from the point of view of the Irish interest successful conclusions’ in Maastricht (see Laursen and Vanhoonacker 1992:504) and that Ireland had had no national interest in joining the UK’s outsider attitude (ibid.: 502). With a view to the other governments’ positions on social policy reform in the IGC, it is essential to mention that all delegations who actually presented reform proposals (i.e. Belgium, Portugal, Luxembourg, the Netherlands, Italy, Spain, Denmark, and France) actually suggested strengthening both competences and QMV (see Schulz 1996:82). Indeed, it was clear at a still early point of the IGC’s negotiations that only the UK was opposed to any extension of Community competences and majority voting. This shows that the overwhelming majority of EC member states changed their position on the EC social policy principles within a few years only. At the time of the adoption of the SEA, i.e. in 1986, unanimity had been the undisputed procedural

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option (outside the field of workplace health and safety), and no additional Community competences for EC social policy were considered appropriate. Only five years later, the situation had changed completely—with the exception of only one single member government whose exceptionally firm resistance had ideological and party-tactical reasons. As outlined above, this was not due to some governments buying social policy concessions from other delegations. It was a matter of changed preferences on the part of almost all EC governments. I hold that this process was based on both perceived functional pressures from the Internal Market (embodied in the 1989 social action programme’s proposals which were blocked by the time of the IGC) and on the consistent communicative action at the working group, Social Council and European Council levels. Between the SEA and the Maastricht Treaty, a joint shaping of preferences took place (see section 2.1 above). It is thus essential not to restrict the analysis to the 1991 IGC itself. Unexpected by intergovernmentalist assumptions, Euro-level actors played a crucial role. In their inputs to the IGC, the Commission, the EP and the ETUC strongly advocated more EC social policy. Even during the IGC’s late 1991 summit, an occasion which is traditionally perceived as a genuinely ‘intergovernmental’ event, the Commission played a pivotal role in social policy reform. The discussion in Maastricht on social policy confronted the UK and all other governments. It was reported to have been ‘certainly the most protracted and possibly most difficult of all our work there’ (the Irish participant Charles Haughey, 1992:500). Reportedly, the Dutch Presidency showed a willingness to compromise by suggesting a text which would have significantly extended the field of unanimity: whenever an issue touched an area without explicit majority rule, general consensus should be needed. This would have been a political spill-back even with a view to the possible ‘Treaty-base game’ under Article 118a, EECT (see above). The British delegation nevertheless rejected this offer, as well as subsequent proposals for individually opting out of single unwanted social policy measures (Schulz 1996:90ff.). When at midnight the IGC seemed to fail because of the social Chapter, the construction of the Social Agreement was initiated by the Commission President: When it looked as if things might break down over social issues, Delors produced language and justification for what would become the ‘social protocol’…the product of prior brainstorming and quick action from the support team and smart politics by Delors himself. As had so often been the case for Delor’s good ideas, it was the obliging Helmut Kohl, by this point looking for a semi-graceful way to end the talks, who placed the proposal on the table. (Ross 1995a:191)

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The details which were finally adopted as a new legal basis for social policy among the eleven, except for the UK, relied essentially on the initial Commission proposal which had been taken up in the Luxembourg draft Treaty (see also Lange 1993:10). 3.2.2 Who pushed for corporatist patterns? In the case of the procedural social policy reforms in the Maastricht negotiations (i.e. the formal establishment of corporatist decision patterns), the Commission did not only rely on submitting its own proposals to the IGC and on being a mediator between the governments in critical moments (see section 3.2.2.1). In addition to all that, it managed to activate labour and industry with a view to reaching its goals (see section 3.2.2.2). 3.2.2.1 The Commission as a mediator between the governments Already before the formal opening of the IGC in December 1990, some delegations and some EC institutions had presented their reform options to the public (see Laursen and Vanhoonacker 1992). Specific proposals relating to the public-private interplay in EC politics, however, were rather rare—notwithstanding the vivid interest in substantive social policy reform, in general. In fact, only the Commission, Belgium, and the EP actively pledged for more social partnership at the EU level during the early phase of the IGC. On 11 July 1990, the EP adopted its Martin II report which included a resolution on the IGC (OJ 90/C 231/97; see also Laursen and Vanhoonacker 1992:282ff.). It considered that Article 118b of the EECT should be amended by indicating that ‘the Community must adopt a legal framework which enables the dialogue between the two sides of industry to develop so that European collective bargaining may be undertaken’ (ibid.: pt 14). On 21 October 1990, the Commission gave its opinion on the draft review of the Treaty instituting the EEC with a view to achieving Political Union (COM[90] 600). Under title I II ‘Strengthening democratic legitimacy: relations between the institutions and the people of Europe’, the Commission warned that [i]t must not be forgotten that citizens are also involved in economic and social development. That is why, as far back as 1985, the Commission took the step of encouraging social dialogue at Community level between representatives of employers’ organizations and trade unions. That process is now enshrined in the Single Act. But it should be given greater emphasis and its organization improved. (III.2)

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As outlined in section 2.2.1, the development of EC social policy was accompanied by a process of polity formation which incrementally attracted private interests as co-actors in the policy process. Industry nevertheless pursued a policy of the empty chair as far as negotiations on binding agreements were concerned (see Streeck 1995b). In time, a need for ‘social partnership’ was perceived by the EC institutions, even by the Council. Against the background of these developments, the Presidency conclusions to the European Council of Rome on 14 and 15 December 1990 (see Europe, 16 December 1990) came as no surprise. They mentioned that there is a wide recognition of the need to extend or redefine the Community’s competence in specific areas. [The European Council] asks the [Intergovernmental] Conference to bear in mind, inter alia, the following areas: the social dimension, including the need for social dialogue; economic and social cohesion. (Article 4, emphasis added) The Belgian delegation to the IGC was pushing hardest for reforms in the involvement of the social partners. A quite far-reaching general social policy proposal of 23 October 1990 suggested that the Council should act by a qualified majority in order to contribute to the progressive harmonisation not only in the areas of social security and right of association but also of collective bargaining (Schulz 1996:75). On 25January 1991,94 the Belgian delegation presented a specific proposal to enhance the role of the social partners in the elaboration of EC social legislation. It argued that while the results of the social dialogue had so far been disappointing, some would argue that in specific cases traditional EC law might be too ‘dirigiste’. Therefore, the social partners should have more than the consultative role which the ECOSOC already played. A Labour Committee should be established, composed of the same number of employers’ and workers’ representatives. It should be appointed by those two groups’ representative organisations, in a manner that made representativeness incontestable. Among the tasks of the Labour Committee should be, first, the autonomous negotiation and signature of collective agreements.95 Such agreements might be transmitted to the Commission for submission to the Council in order to be integrated into the body of Community law.96 Second, the Labour Committee should be involved in the development of EC social law. It should be consulted, like ECOSOC, on Commission proposals in the relevant area. If the Committee estimated that the question should be the object of a collective agreement, it should enter into negotiations.97 Subsequently, the Commission should submit to the Council a proposal on the formalisation of this agreement which should, in case of Council

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approval, become binding on the whole Community. In case the collective agreement covered only part of the initial Commission proposal, the Commission could propose a traditional legislative procedure in addition. The Commission might furthermore, when proposing any Directive, provide for a transposition via obligatory collective agreements at the national level instead of traditional regulatory acts. A further power of the Labour Committee as proposed by Belgium was the right to ask the Commission, at any time, to submit to the Council a proposal within the realm of the Committee’s competences (point I.2). When the Commission presented a draft text for the reform of the social Chapter at the end of March 1991,98 it looked quite similar to the Belgian proposal. The Commission took over the priority for action by the social partners over action by the Council (i.e. ‘functional subsidiarity’ as opposed to regional subsidiarity which was also to be included in the Maastricht Treaty). An ‘institution for concertation’ such as proposed by Belgium was, however, only included as one possible option. Before the Commission could present a proposal, it should consult an as yet unspecified forum (the text included: ‘…’) on the question of whether the same goals could be attained by a framework agreement by the social partners such as mentioned in Article 118b of the EECT. Only if such an agreement could not be concluded within a reasonable time, the Commission would propose legislation to be adopted by the Council and the EP, after consultation of ECOSOC.99 Who exactly ‘…’ should be was left open in this Commission proposal, subject to adaptation according to, first, the results of the social dialogue on this matter, and, second, the possible introduction of a new concertation institution (see also Notabene, no. 63:7; Schulz 1996:81). The differences to the earlier Belgian proposal were thus that • the form or body of social partner co-operation was left open, subject to results of the social dialogue; • the Commission itself should trigger social partner negotiations if it considers that a ‘framework agreement’ is possible; • if no agreement was reached within an adequate time (Commission scrutiny) traditional procedures come into play; • the national social partners could be engaged to implement EC Directives, in the specific legal act itself; • in cases where implementation did not rest with the member states, the Commission should be supported in the process of implementation by a concertation institution (which was still to be designed); • if the signatories so desired, agreements concluded under the autonomy of the social partners could either be made generally binding by a Council decision (by qualified majority, after Commission proposal and EP and

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There is no written proof that coalition building had been going on prior to the Belgian proposal to the IGC. Several interviewees have, however, pointed to the fact that there were excellent contacts between the relevant Commission units and the Belgian social ministry, and that there might have been a ‘conspiracy’ among Brussels-based personalities interested in prompting Eurolevel social partnership (see also section 5.4). It therefore seems to have been skilful tactics by the Commission to first let a government launch its master plan. In any case, once spread, the idea of a formal participation of labour and industry in social policy decisions had a life of its own. On 12 April 1991, the Luxembourg Presidency presented a first proposal for a draft treaty with a view to achieving political union (published in Europe, Documents no. 1709/1710, Europe, 3 May 1991). The proposals on the participation of societal interests were less far-reaching than the Commission’s and hardly went beyond the existing Article 118b of the EECT: The Commission shall have the task of promoting consultations between Community organizations representing workers and employers. The consultations mentioned in the first paragraph may lead to collective agreements involving the whole of the Community and covering in particular the provisions for the implementation of the directives adopted pursuant to Article 118a. Collective agreements shall be implemented in accordance with each Member State’s own national procedures. (proposed Article 118b) The official draft Treaty on the Union presented by Luxembourg on 18 June 1991 (published as Europe, Document no. 1722–3, Europe, 5 July 1991), by contrast, represented a synthesis of the work carried out by the two IGCs (on Economic and Monetary Union and political union) until then. This document contained corporatist patterns already close to the Maastricht Social Agreement’s: Article 117: The Community and its Member States shall have as their objectives…the promotion of dialogue between management and labour. Article 118.4: A Member State may entrust management and labour with the implementation of all or part of the measures which it has laid

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down in order to implement the directives adopted [under the social provisions]. Article 118a: Before submitting proposals in the social policy field, the Commission shall consult management and labour on the advisability of Community action. Article 118b: Should management and labour so desire, the dialogue between them at Community level may lead to relations based on agreement including agreements which shall be implemented in accordance with the procedures and practices peculiar to each Member State. In the field referred to in Article 118, where management and labour so desire, the Commission may submit proposals to translate the agreement referred to in paragraph 1 into Community legislation. The Council shall act as laid down in Article 118. To the surprise of many, the following Dutch Presidency would not continue the IGC on the basis of the earlier texts. The new draft of September 1991 was in many aspects different, though not in the case of the provisions of interest here. In general, the Dutch draft text sharpened the disagreements so that the Foreign Ministers of the twelve member states decided to continue work on the basis of the Luxembourg draft treaty (Europe, 3 October 1991; Laursen et al. 1992:17). Meanwhile, another Commission initiative with a view to establishing social partnership flourished. 3.2.2.2 The Commission as a mediator between private interests Following an initiative by the European Commission in February 1991 (Cassina 1992:13),100 the three top associations ETUC, UNICE, and CEEP had sat down with the Commission (Schulz 1996:86) to formulate their own proposals to the IGC. In a letter to the President of the Council dated 28 June 1991, they gave notice ‘of the progress of the social dialogue ad hoc working group on the role of the social partners and of [their] willingness to make a timely contribution to the work of the Intergovernmental Conference’ (Social Europe, 2/1995:138). At their meeting of 31 October 1991, the ETUC, UNICE, and CEEP reached an Agreement on how to strengthen the role of the social partners in the new Treaty. They drafted proposals for the wording of Articles 118.4, 118a and 118b of the draft treaty under discussion (while not examining other areas of treaty reform; see document published in Social Europe, 2/1995:138ff). Compared to the Luxembourg text of June 1991, the social partner text showed the following changes and innovations:

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• the Commission should facilitate the dialogue between the social partners ‘by ensuring balanced support for the parties’ (Article 118a.1); • a system of double consultation, initially on the possible guidelines of Community action and subsequently on the content of the envisaged proposal, was suggested; the social partners should transmit to the Commission an opinion or ‘a recommendation’ (no further specification); • in case that the social partners negotiate an agreement instead of legislation, the duration should not exceed nine months, unless the negotiating parties agree on an extension; • in those cases where the social partners ask for implementation of their agreement by the Council, this should happen via ‘a decision of the Council on a proposal from the Commission, with regard to the agreements as they have been concluded’ (emphasis added);101 • while both the Commission proposal and the second Luxembourg draft had explicitly or implicitly provided for a consultation of the EP and the ECOSOC before implementation by the Council of a collective agreement, the social partners suggested a Council decision after involvement of the Commission only; • a new sub-paragraph to Article 118 suggested that even in cases of implementation by management and labour, a member state concerned ‘shall take such action as is needed to enable it all times to secure the results to be achieved by virtue of the directive’; • with a view to the implementation of measures by the national social partners, it was suggested that a member state may entrust management and labour ‘at their joint request’ ‘with the implementation of the directives’ (Luxembourg draft: ‘the implementation of all or part of the measures’). The social partner proposals were accepted by the Dutch Presidency almost without changes. On 8 November 1991, a new draft Union Treaty was presented to the IGC which revised the earlier Luxembourg draft in terms of the majority view to emerge during the work of the prior few weeks (see Europe, Document no. 1746/1747 of 20 November 1991). In the field of social partner involvement in EC social affairs, this second Dutch draft indeed already represents almost exactly the wording of the Social Agreement. The essence of the Luxembourg text of June was taken up but extended according to the social partner proposals.102 Some changes strengthened the Community institutions vis-à-vis the social partners. When the social partners negotiate an agreement instead of legislation and need an extension of the nine-month deadline, the Commission’s agreement was needed (not only the social partners’ such as in the latter’s own proposal). And the implementation by the Council of collective agreements was not necessarily

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‘with regard to the agreements as they have been concluded’ (the latter provision was deleted). However, the powers of the Commission were not stretched as far as in the Commission’s own proposal of March 1991.103 This text104 was finally adopted at Maastricht, without substantial changes,105 by the eleven governments that finally subscribed to the Social Agreement. Interviews with UNICE, CEEP and ETUC officials reveal that even the social partners themselves were surprised that their 1991 Agreement went straight into the Treaty without major changes. They assume that the governments felt obliged to bring the EC somewhat closer to society, and that the governments might not have expected collective agreements to actually happen. Commission sources agree that the manifold references to social dialogue and the social partners in the years prior to the Maastricht Treaty were a relevant background to the ‘accident’ which happened at Maastricht: what first seemed to be ‘cheap talk’ about a European social model seems to have prompted steps in this direction after all. Whether the significant reform potentials of the Maastricht reforms are being realised in current European social policy-making will be the central question in Chapter 4 of this book. 3.2.3 Synopsis: the social dimension of a ‘grand bargain’ Section 3.2 set out to discuss the crucial question why the Maastricht Social Agreement with its significant substantive and procedural reforms was actually adopted. It was argued that a state-centric and rationalist approach (such as that by Lange 1993) cannot adequately resolve this puzzle. First, Euro-level actors had a crucial impact. This concerns particularly the Commission and the Euro-level social partners ETUC, UNICE and CEEP. Second, views other than purely economic ones expressed in nationally preset preferences played a role. I hold that when the governments came to the negotiation table at Maastricht, a long-term process of joint preference formation on the issues of strengthening Community social policy (by extending competences and majority voting) and of including management and labour as responsible co-actors had already shaped the views of all governments except the British. ‘Where there are no “objective” criteria on which to base choice, ideas focus expectations and strategies. Political elites may settle upon courses of action on the basis of shared cultural, normative,…or causal beliefs’ (Goldstein and Keohane 1993b:18). As outlined in section 2.3, the idea of supporting the ‘European social model’ at the EC level via a set of social minimum standards and social dialogue had gone through a process of sedimentation, between the agreement on the Internal Market as a Treaty goal in 1986 and the Maastricht Treaty reforms. Both ‘social minimum

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harmonisation’ facilitated by QMV and ‘social dialogue’ may be seen as constructed focal points (as e.g. mutual recognition in the economic field; see Garrett and Weingast 1993:204). They were developed under Commission auspices and spread with the help of other actors (notably the EP, the ETUC, several governments) in a situation where ‘some focal point was necessary to ensure coordination, to signal commitments, and to promote cooperation in a game in which the cooperative equilibrium was difficult to sustain’ (Goldstein and Keohane 1993b:19). The 1989 Social Charter proved that the eleven had formed a joint perception on those issues. That the UK refused to join this mainstream indicates that joint EC interest and identity formation are contingent. That it is nevertheless ‘real’ is not in the least place indicated by the terms of discourse (the UK was once again perceived as an ‘awkward partner’; George 1990), and by the fact that the others decided to progress on their chosen path, leaving the UK in an outsider position. Only an analysis which is neither statist nor static (see Gehring 1995:9) uncovers the missing piece of the puzzle about the Maastricht Social Agreement: joint EC level preference formation had occurred during the late 1980s, so that even those governments with adverse economic interests came to Maastricht ready to strengthen the ‘social dimension’ (as marketed by the Commission and other Euro-level actors) which was meanwhile perceived as a legitimate and necessary corollary to the Single Market.

4

Policy-making under the Social Protocol

This chapter presents an analysis of the relevant social policy deals struck since the Treaty on European Union came into force on 1 November 1993. Did the so-called social partners get more involved in EC decision-making? Which was the outcome of the Union’s attempts to strengthen the social dialogue? Is there a stronger will for compromise than before on the side of industry, possibly brought about by pressure originating from the increased probability of European social legislation? In order to answer these questions, several case studies will be presented (on European Works Councils, parental leave, and atypical work, see sections 4.1, 4.2, 4.3). I will furthermore give an overview on the practice of the Social Agreement to date, including also those issues which are still pending in autumn 1997 (see section 4.4). If we imagine a horizontal time axis running through the empirical field of EC social policy, the case studies present vertical perspectives on the time axis. Chapter 5 on the development of the organisation of labour and management, by contrast, gives a horizontal perspective on the empirical developments by following the evolution of the Euro-groups and their stance vis-à-vis the ‘social dimension’ through the integration process. 4.1 The first case: European Works Councils The issue of introducing Works Councils at the European level was the first one to be discussed under the Social Protocol as a legal basis. It was a symbolic test case because it represented a special interest of both the European trade union movement and the European Commission who considered it an essential counterpart to the de-regulatory Internal Market Programme. If the enlarged and liberalised market allowed industry to move more freely across borders and to internationalise, the labour force which had to face these changes should at least not suffer disadvantages in terms of enterpriselevel ‘democracy’. It made this highly controversial case even more outstanding that by the time the Maastricht innovations came into force, it 97

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had already had a long and unsuccessful history. Neither the UK’s nor the UNICE’s disagreement in principle had been lifted despite manifold changes to the draft offered. The Social Agreement’s new framework conditions nevertheless allowed a breakthrough. While the possibility of majority voting without the UK indeed had a major impact, the reinforced social dialogue provisions had not yet taken full effect. 4.1.1 The background As early as 1980, the EC Commissioner for social affairs, Henk Vredeling, had tried to introduce employee information provisions for enterprise-related subjects. The proposed Directive (OJ 1980/C 297/3) would have obliged transnational and complex national firms to inform their staff annually of the structure of the enterprise, its economic and financial situation, as well as the foreseeable development of employment and investment. The Commission’s reasoning was that a common market should also comprise equal information and consultation rights, especially for workers employed in different national subsidiaries of the same enterprise.106 The diversity in national standards was thought to distort competition and should thus be terminated under a Directive based on Article 100 of the EECT. This legal basis implies unanimous decision-making in the Council on a proposal by the Commission and after the consultation of the EP and the ECOSOC. The Commission proposal was welcomed by the ETUC, while industry strongly objected to the idea of community-wide rules on employee information. Despite significant changes to the Commission draft being offered,107 the necessary unanimity in the Council was continuously prevented by perceived incompatibility between national practices and by ideological objections (Hall 1992:548). After six years of debate, in 1986, Council conclusions (OJ 86/C 203/01) explained that it had not been possible to reach a compromise on the draft. The governments stressed that they had stated as early as 1985 that in some member states, the social partners were solely responsible for the matter. The Council went on to ask the Commission to continue its work, especially by studying national developments and by contacting the social partners. Employers’ and employees’ federations within the Community were encouraged to continue their dialogue ‘at all appropriate levels’ in order to reach agreements providing for the information and consultation of employees, especially in the context of new technologies. The Council, for its part, stated that it would not continue to negotiate until the beginning of 1989. This early attempt to engage the social partners failed because of conflicting views on the necessity of Euro-level provisions in this field. A common position of the Val Duchesse social dialogue working group ‘social dialogue

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and new technologies’,108 signed on 6 March 1987, clearly stated that the signatories had opposing views on the necessity of Euro-level provisions in the field of employee information and consultation (Commission 1991:45).109 The 1990s provided a more favourable background for employee participation. In 1989, eleven member states had signed the so-called EC Social Charter which states in Point 17 that ‘Information, consultation and participation for workers must be developed along appropriate lines, taking into account the practices in force in the various member states. This shall apply especially in companies or groups of companies in two or more member states of the European Community.’ The Commission’s Social Action Programme to implement the Charter provided for an ‘instrument on the procedures for the information, consultation and participation of the workers of European-scale undertakings’. The non-binding references concerning the information and consultation of workers in both the ‘Social Charter’ and the relevant Commission Action Programme subsequently served as legitimising political reference points for those EC actors which promoted the issue (i.e. the Commission, the Parliament, the ECOSOC; some governments and pressure groups). Increasingly, trade unions would refer to information and consultation as the workforce’s proper right within the Internal Market, which in their view had too long been blocked by the employers and the Council. An important economic backdrop to these claims was the wave of enterprise mergers and acquisitions during the late 1980s and early 1990s. It increased pressure to adapt employee participation regulations to the internationalised economy. Relevant national rules were increasingly outdated as they could not impose a transnational flow of information. The SEA and the subsequent economic restructuring thus created problems which for structural reasons could not be tackled at the national level. Thus, ‘expectations and political activities [had to shift] towards a new centre’ (Haas 1958:16).110 This functional spill-over process was supported by the fact that multinational enterprises increasingly decided to establish such bodies on their own initiative (see EIRR 228 and 229).111 A split between the organised interests of European industry became obvious when the Round Table of European Industrialists took a much more favourable stance towards this project than UNICE (e.g. Gold and Hall 1994:178). The Commission even financed enterprise-level attempts to establish European Works Councils, long before the Directive was adopted. The EP, together with the ETUC, succeeded in pressing for a budgetary allocation as high as 17 million ECU (1993– 1995; 1992:14 million) for the organisation of some 400 group-level meetings and seminars with a view to establishing European Works

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Councils (Bobke 1994:7; see Europe, 24 September 1994:14). In the words of the EP’s Committee on Budgets, these appropriations were ‘all the more necessary given the continuing failure of the Council to adopt the proposed Directive on the establishment of European Works Councils’ (EIRR 246:15). Together, economic (‘merger-mania’) and legal pressures (de facto devaluation of national regulation) led to an extension of the original scope of commitment in the sense that an additional issue area was made subject to joint EC rules. In short, functional spill-over occurred (see the definition in section 1.1) because finally, a large majority of the member states concerned opted for Euro-level employee consultation. The content of EC action in the field of employee information and consultation however, underwent some change during the process. It seems that in 1990, the Commission had originally envisaged re-presenting a draft resembling the Vredeling proposal, including information and consultation via the local management. But by then, it had become a major aim of the ETUC within the so-called ‘social dimension of the Internal Market’ to establish labour—management relations at the Euro level. It called for Community legislation establishing group Works Councils in European transnationals (see ETUC 1988). Trade union pressure via the ETUC and the ECOSOC112 obviously redirected the Commission’s approach towards information and consultation bodies at the European level (see Hall 1992:550ff.). While still integrating the proposal structurally with national systems of employee representation through the participation of members from existing national representative bodies (if possible), a new forum was envisaged in which these representatives were to sit—the European Works Council. With the Vredeling project, the Commission had explicitly aimed at preparing a level playing field within the Common Market by establishing provisions of ‘equal value’ concerning the information and consultation of workers in geographically (but not necessarily nationally) distant subsidiaries (see preamble of the amended draft, pt 9). But the 1990 Commission proposal (OJ 91/C 39/10) no longer included information between parent enterprise and subsidiaries within single states in order to prevent conflicts with existing national provisions.113 The draft provided that on a written request from any employees or their representatives (or the central management), a ‘special negotiating body’ with employee representatives would be formed to negotiate the establishment of a European Works Council with the central management. In case these parties failed to reach a written collective agreement on the nature, composition and functions of a European Works Council within a year’s time, nationally defined minimum information and consultation requirements (including a European Works Council) were suggested to apply. Only in the case of a unanimous agreement between the Special

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Negotiating Body and central management not to establish a European Works Council, the minimum conditions outlined in an annexe should have applied (without European Works Councils). According to this annexe, information on the progress of the organisation’s business and its prospects must be provided at least annually. Timely consultation was required about any management proposal likely to have serious consequences for employees’ interests (see point 1 of the annexe). In short, the draft gave considerable leeway to, first, social partner negotiations at the micro-level, and, second, to the single governments concerning their legal minimum requirements (Bersch 1991:27). 4.1.2 The negotiation process on the 1990 draft Without the possibility of majority voting, the European Works Councils Directive would probably not exist now. The outlined 1990 Commission draft had already given considerable leeway for derogation to the single governments (concerning their legal minimum requirements) and to social partner negotiations at the enterprise level. Nevertheless, little progress was made in the Council until the Danish Presidency during first half of 1993 announced its intention to reach a political agreement at least between the eleven member states. Thus, the British government which had continuously abstained as a matter of principle was to be excluded for the first time—following the lines of the Social Agreement which had been signed in 1992 (but did not come into force until 1 November 1993). However, at the Social Affairs Council in Luxembourg in June 1993, even the eleven governments could not reach compromise on crucial details of European Works Councils, such as the size of a ‘company of Community dimension’,114 the definition of the notion of ‘company exercising control’, and the possible exemption for ships from the merchant navy115 (Europe, 3 June 1993:11). The succeeding Belgian Presidency prepared a compromise text ‘on the establishment of European Works Councils or procedures in Communityscale undertakings and groups of undertakings for the purposes of informing and consulting employees’ (emphasis added). The title indicates the key difference to the Commission’s draft: the new version promoted a free choice between a European Works Council and some other ‘information and consultation procedure’ as the outcome of the negotiations between the central management and employee representatives. This ‘procedure’ had to fulfil certain conditions but did not provide for a European Works Council to be established as a body. After the last Social Affairs Council before the Social Agreement came into force (i.e. on 12 October 1993), the Council President announced that the majority of member states broadly agreed on this draft. By then, fourteen

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expert meetings had been held, five meetings of COREPER and five at Council level since the new proposal had been presented in 1990 (Europe, 20 November 1993:14). But it was obvious that without majority voting (which was strongly advocated by the EP), no decision would be taken, even among the eleven member states. Once again, we see that majority decision-taking promotes the development of common policies.116 Under these conditions, it came as no surprise that immediately after the Maastricht Treaty came into effect on 1 November 1993, the Commission started the procedures under the Social Agreement which provided for social partner consultation/negotiation as well as for QMV in the Council. 4.1.3 The positions of management and labour The case of the European Works Councils shows most clearly the significant changes taking place on the employer side. These developments are crucial for the future of EC social policy and will therefore be outlined in some detail. The initial positions of employers and employees could have hardly been more controversial. The ETUC had from the outset advocated a legally binding European Works Councils system. During the process of the establishment of the Internal Market, it urged that there should be a legal framework guaranteeing the information and consultation of employees on matters of European-wide enterprise planning (see ETUC 1988:58). Therefore, the ETUC had found unacceptable the Council’s postponing of the Vredeling Directive until at least 1989 (ibid.: 49). In later statements, it increasingly considered worker information and consultation to be their proper right, which had been blocked for too long by the Community and the employers (e.g. Europe, 4 December 1992:15, for the European Metalworkers’ Federation). When the Commission launched its new initiative on European Works Councils at the beginning of the 1990s, UNICE rejected the draft because it was deemed to undermine national law, the authority of management and the autonomy of the social partners (UNICE position paper, 4 March 1991:2). The draft was criticised for being ‘over-institutional, over-rigid, and bureaucratic in character’ (UNICE position paper, 7 October 1991:1). The effects were estimated to be ‘unnecessary and intolerable complications’ and a ‘negative impact on investment, especially in the less developed regions’ (UNICE position paper, 4 March 1991:2). While acknowledging in principle the great importance of worker information and consultation, UNICE went on to present an alternative proposal to the Council. It suggested a ‘practical, workable Recommendation…, laying down the basic principles of information and consultation…[and making] it possible to adapt employee information and consultation processes to the…widely

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differing structures and decision-making procedures which prevail in the Community’ (UNICE, ibid.). But this non-binding form of EC intervention was rejected by the Commission as well as by the European trade unions who stressed the fact that it could not be left to local managers to decide if and how workers should be informed on the state of their parent enterprise (Europe, 21 October 1991:14). When during the first half of 1993 the Danish Presidency announced its intention to reach a political agreement between eleven member states at the Social Affairs Council in Luxembourg on 1 June, the SecretaryGeneral of UNICE, Tyszkiewicz, announced in a press conference that his organisation was deeply concerned. The suggested Directive would damage existing worker information and consultation systems; it was a ‘top-down’ measure imposed on companies; it ignored the principle of subsidiarity; it reduced company competitiveness; it devaluated and demotivated local management and workers’ organisations; it would unnecessarily add to already excessive administration costs for companies; it appeared more concerned with ideology than with a genuine desire to improve information and consultation in companies. The UNICE representative stated that the question of worker consultation could be resolved through free negotiation and not through legal means, as it was ‘a cultural matter’ (Europe, 13 May 1993:15). The obligation to fulfil at least the minimum conditions of the draft Directive were ‘unacceptable as it makes the setting up of a centralized information-consultation system obligatory’ (ibid.). When it became clear that QMV would soon be available for the Works Council issue, UNICE changed its former attitude of rejecting any binding Eurolevel provision. On 20 September 1993 (and clearly in anticipation of the decision to use the eleven-only procedures), UNICE’s Secretary-General Tyszkiewicz announced that: UNICE is ready to sit down with the Commission and/or the European unions to develop a positive and constructive procedure for information and consultation that is acceptable to all parties. It should commit companies to the results that need to be achieved, leaving them freedom to choose the best methods and procedures to follow. (quoted from EIRR 238:13; see also Europe, 15 October 1993:7) It is not surprising that the trade unions nevertheless remained somewhat sceptical. In the words of the ETUC’s confederal secretary, Buschak: ‘The employers are now in headlong flight as the pressure on them grows from the increasing number of policymakers who are now ready to vote the Directive through. But UNICE’s offer is too late and too inconsistent’ (EIRR 238:14). Also ETUC’s Secretary-General, Gabaglio, stated that the

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employers’ ‘professed desire’ to negotiate at the very last minute before the eleven governments would legislate was hardly credible (ibid.; see Europe, 23 September 1993:15). Nevertheless, there soon followed some more pragmatic statements, and commentators speculated that the ETUC might be ‘swayed by the legitimacy that its involvement in European-level agreements would confer’ (EIRR 238:14). Commissioner Flynn, while confirming that the Commission would as a consequence of any failure to collectively agree on worker information follow the legislative path, stressed that ‘it would be a strategic mistake to close the door on negotiations the first time the new procedure is used’ (Europe, 2 December 1993:12).117 On 17 November 1993 the Commission officially decided to start the procedure laid down in the Maastricht Social Protocol and held the first round of consultations with the social partners over six weeks. To seek reactions to the possible direction of Community action in the field of information and consultation procedures in Community-scale undertakings and groups of undertakings, it submitted a document to a series of Euro-groups.118 After explaining the history of the legislative project and its possible effects, the Commission’s text asked some questions on the scope and contents of a possible regulative act (EuroAS 3/1994:4). Most of them responded within the specified six weeks and reiterated their well-known policy stances: e.g. UN ICE favouring a flexible and voluntary approach, the ETUC demanding binding EC law. The follow-up made it clear that the Commission intended to maintain its central role within the European policy process also under the Social Agreement. Obviously for tactical reasons, it changed its draft Directive and set a narrow six-week deadline for the second consultation (by 30 March 1994). The text transmitted to the social partners took up essential elements of the Belgian Presidency’s draft but—in the words of a Commission spokesman— ‘introduced a greater degree of flexibility’ in order to increase the chances of agreement (see Europe, 10 February 1994:8). In fact, thresholds were raised significantly. For example, the consultation mechanism was to be triggered only at the request of 500 employees or their representatives from at least two member states, while the Belgian draft had provided for a simple written demand by any workers’ representation. The new draft stressed even more the alternative of setting up ‘mechanisms’ for transnational information and consultation of employees without a transnational structure. The very notion of European Works Councils was dropped from the title and throughout the document replaced by the formula ‘mechanisms for informing and consulting employees’. This major change became known before the official presentation of the Commission draft and was criticised by the ETUC as a ‘complete U-turn by the Commission in relation to its initial plans’ (quoted in Europe, 3

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February 1994:16). The workers’ federation therefore asked that the Commission return to its initial approach in order not to prejudice the second phase of consultation with the social partners by a change which affected the very basis of the proposal (ibid.). This harsh criticism did not prevent the Commission from adopting its draft along the disputed lines. Even the employers’ side admitted that its critical attitude seemed to have inclined the Commission to ‘slightly relax’ the draft Directive (UNICE Secretary-General Tyszkiewicz, quoted in Europe, 11 February 1994:15). Despite their remaining criticism of certain aspects of the Commission’s text,119 the general cross-sectoral European employers’ federations (UNICE and CEEP) officially declared their willingness to enter into collective negotiations with the ETUC. After more than forty years of European integration without Euro-level collective bargaining on specific socio-economic issues,120 this indeed represented a unique sea change. The ETUC was sceptical vis-à-vis this (presumably tactical) new approach and suggested holding preliminary talks on the possibility of entering into formal negotiations. After two exploratory meetings between the three crosssectoral top federations, during the spring of 1994, an exchange of conditional offers to negotiate took place. At that point, even the ETUC was optimistic: Secretary-General Gabaglio stated in a press conference that an agreement on worker information and consultation in Communityscale enterprises would be ‘a major step forward which will open the road to European collective agreements’ (quoted in Europe, 19 March 1994:14). It seems that both the industrial relations aspect of the first Euro-level collective agreement under the Social Protocol, and the Commission’s lowering of standards (which might later have been endorsed in a prospective Council Directive) made the ETUC somewhat more interested in starting negotiations. Table 4.1 summarises the participants’ preferences in these pre-negotiations. Table 4.1 Euro-Works Councils: The preferences of labour and industry

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The crucial issue of disagreement between the prospective social partners was the ‘need for the negotiating parties to adopt a flexible approach and to examine alternative methods and procedures’ (Hornung-Draus 1994:4). This was regarded as indispensable by UNICE and CEEP121 but was opposed by the ETUC which wanted explicit rights for the employees of transnational enterprises, obligations for central management, and rather centralised fallback provisions.122 An ex ante agreement on the latter points would, in the employer federations’ eyes, have left purely ‘technical details’ for proper negotiations (ibid.). Nevertheless, three days before the closing date of the second phase of consultation, UNICE and CEEP broadly conceded to the ETUC’s principles (see Gold and Hall 1994:180). This was made possible by the crucial involvement of the Commission, which was once again ‘unusually well-placed to massage and orchestrate’ the policy-making process via its brokerage role (Mazey and Richardson 1994:184). There was also consensus to submit any final agreement to the Council for implementation as European law. Responsible Commission officials started their weekend assuming that the first procedure under the Social Agreement had ended with a collective agreement (interview with senior Commission official, April 1995). Just before the deadline (30 March), however, the stance of the British organisations, the Trades Union Conference (TUC) and the Confederation of British Industry (CBI), changed the situation. The British employers’ federation withdrew from the negotiations on 29 March, officially because the compromise reached in Brussels just before the weekend could not be submitted to the relevant decision-making body before the formal deadline on Monday. But, reportedly, the latest pre-conditions of negotiations went too far towards conceding the establishment of a transnational structure (see e.g. EIRR 243:3). By the spring of 1994, UNICE was not yet prepared to out-vote its British member organisation. Furthermore, the TUC and the ETUC considered the participation of the CBI to be indispensable. In addition, the end of the Commission deadline had already come. That the ETUC immediately asked the Commission to present a draft Directive to the Council was in any case considered by the employers to express labour’s initial preference for the legislative route (Europe, 24 March 1994:10).123 It is very difficult to trace the reasons for the failure of the social partner talks in the Works Councils case, and interviews with the actors are not of much help. Indeed, each party puts the burden of blame on the other (see also Ross 1995b: fn. 75). This reveals the actors’ perception that a normative consensus on the desirability of collective agreements had already developed. It seems that labour and industry indeed felt a ‘moral obligation’ to agree. The failure was felt to need a ‘good’ justification, and ideally the other side should carry the burden of being the one to blame. ‘Social dialogue’ was thus alive and kicking as a social institution with normative validity, in the minds of the actors.

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4.1.4 Back to the EC institutions Not only the bargaining between labour and industry but also the elevenonly decision process among the EC institutions had a first try with the Euro-Works Councils. Indeed, QMV under the co-operation procedure made a significant difference, both in terms of probability of compromise (even after the exclusion of the UK) and in terms of standards. Furthermore, the relationship between the Commission and the other EC institutions was influenced: under majority rule, the Commission’s power of initiative increases because the Council may only change the Commission’s drafts by a unanimous decision. For the EP, the Commission is a decisive player, too, because only amendments taken up by the Commission can be adopted by a majority of the Council delegations, whereas all others would have to be voted unanimously and therefore had little chance of being accepted. After the failure of the social partners to conclude an agreement, the Commission proposed another draft Directive to the Council. It resorted to the Belgian Presidency’s compromise text in general, rejecting weakening amendments that had been introduced into the Commission’s draft submitted to management and labour. The national governments were again given more leeway, for example in the determination of the structure of bodies which should negotiate agreements at the enterprise level (see Hohenstatt 1994).124 UNICE criticised the fact that the minimum conditions provided for in the annexe were upheld. This was thought to impose the creation of a central and inflexible European Committee, i.e. ‘a Works Council to which UNICE is opposed’ (quoted in Europe, 14 April 1994:16). Otherwise, UNICE was pleased that the Commission proposal to the Council included several modifications according to employers’ wishes. This draft (OJ 94/C 135/8) was transmitted to the EP in a great hurry in order to allow for the Social Council’s Common Position to be approved at its July 1994 meeting. Timely adoption by the Council was clearly ranked higher than detailed parliamentary contributions. In their first reading, the MEPs asked for amendments to twenty-seven aspects, striving for higher standards and a broader scope of the Directive (for example, by reducing the number of necessary employees from 1000 to 500). The Commission did not take up most of the EP’s suggestions125 because it wanted to stick as closely as possible to the existing Council compromise and to the social partners’ quasi-consensus (EuroAS, 6/1994:4). This strategy obviously worked well. The Common Position was adopted as scheduled. Portugal eventually abstained because it considered the subject to require ‘the greatest consensus between the social partners, at Community level, which unfortunately was not the case’ (Europe, 20 July 1994:15). The only change to the relevant Commission text was the

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extension of the period for the enterprise-level negotiations from two to three years. For the French, this additional period strengthened ‘the determination to leave the field open to negotiation as far as possible’ (Europe, 23 June 1994:9). This was backed by the Commission. In its second reading, the EP acted swiftly and pragmatically as a ‘responsible co-legislator’. Despite the fact that most of its prior suggestions had not been taken up, it introduced quite ‘modest’ (Commissioner Flynn quoted in EIRR 249:2) amendments only. The Commission adopted some of them (e.g. a lower number of only 100 workers to be employed in at least two member states for the Directive to apply). They were, however, not accepted by the Council when it adopted, on 22 September 1994, Directive 94/45/EC ‘on the establishment of a European Works Council or a procedure in Communityscale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees’ (OJ 94/L 254/1). Following a frequent pattern of recent EC social policy (see the Directives on Pregnant Workers, Young Workers, and Working Time), an abstention by one or more member states facilitated ‘unanimous’ decision-making by the rest of the Council members.126 Evidence supports the hypothesis that without the possibility of being outvoted, Portugal would not have abstained but might have blocked the Directive. While the official explanation for the abstention was only that Portugal felt itself to be a traditional defender of the principle of worker information and consultation, statements by the Portuguese delegation were in fact quite hostile. The wording of the Directive was deemed to risk compromising the development of the social dialogue at Community level or even to reduce its role, and to promote company relocation. Furthermore, Portugal considered that the Directive ‘clearly oversteps what would be necessary to adequately ensure worker information and consultation’ (Europe, 20 July 1994:15). This indicates that under a unanimity requirement, the other governments might have had to significantly lower standards to prevent Portuguese opposition at all. 4.1.5 The results The Directive ‘on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings provides for worker information and consultation of approximately 4.5 million employees in 1.200 enterprises in the Community (Bobke 1994:6) (see Table 4.2). As the title suggests, the social partners may, however, choose a more decentralised approach compared to the European Works Council. That such a body has to be established if the subsidiary minimal provisions come into play is the comparatively more ‘centralised’ approach which had always been favoured by the ETUC. UNICE would

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Table 4.2 The European Works Councils Directive (overview)

have preferred a ‘fall back’ to more decentralised procedures of information and consultation in case of non-agreement (see e.g. Hornung-Draus 1994:5). However, the subsidiary provisions come into play only after three years of unsuccessful negotiations between management and labour. In the European Works Councils case, European employers had to realise that there was a will to legislate among the necessary qualified majority of Council members. Relying on the fact that the debate on European Works Councils had already seen many years and many stalemates go by without the Commission and most member governments having lost their enthusiasm, the ETUC was rather successful in the end with its tough stance to pose pre-conditions to any entering into formal negotiations. It could, however, be very confident of a Commission proposal and of a Council decision by the eleven taking place in the case of a failure of this approach. The results in terms of existence and rights of Euro-level Works Councils seem to have indeed been the crucial stake for the ETUC. These substantive concerns were not easily traded for general industrial relations considerations about the usefulness of reaching the first collective agreement under the innovative post-Maastricht social policy rules. On the eve of the relevant Council session of 22 September 1994, the ETUC stated that the most important objective was approval of the Directive without any further delay. However, it would have welcomed the adoption of some of the EP’s amendments such as the shortening of negotiation time (see Europe, 22 September 1994:14). At the same time, UNICE reaffirmed its ‘firm opposition’ to the proposed Directive. Its Secretary-General invited the Council to take into account that ‘the future of the social dialogue will be called into question if employers’ views are ignored…. In case of adoption, this Directive will be the source of numerous conflicts and will ruin industrial relations at company and European level’ (Europe, 22 June 1994:15).127 UNICE did specifically agitate against the fall-back provisions of the annexe, which were deemed to ‘inevitably bias any negotiations towards the rigid,

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centralized European Committee structure, thus forcing companies into a bureaucratic straitjacket, upsetting existing industrial relations patterns and delaying decision-making. This will severely impair European competitiveness’ (Europe, 13/14 June 1994:15). By contrast, the Commission calculated that ‘in general, the gross cost per worker of these procedures is unlikely to be more than ECU 10 per year’—which for multinationals would be ‘only a drop in the ocean when compared…with corporate entertainment or sponsorship budgets of most companies of that kind’ (Commissioner Flynn, quoted in Europe, 21 May 1994:13). With a view to the contents of the Directive, its regulatory pattern in particular seems noteworthy. Indeed, the principle of double subsidiarity (as already outlined in section 3.1.2) is shown at its best. The most traditional aspect of ‘subsidiarity’ in the case of the European Works Councils Directive is the considerable leeway for member states in the process of transposition into national law—although it is comparatively strong in the social law context.128 Also, the strategy of building on existing national regulations or practice (for example, in the election or appointment of the members of European Works Councils and in their protection or guarantees) as well as excluding threats to existing rights under national law are well known (Bercusson 1993). But the European Works Councils Directive is unique in at least two features: first, social partner agreements have never previously played such a central role in making the aims of an EC Directive reality at the local level. Second, it is for the first time possible in EC social law to fully pre-empt the obligations arising from a Directive via agreements at the firm level.129 When the Commission submitted its final proposal to the Council, EC Commissioner Flynn explained: ‘The entire thrust of the legislation on the table now is to allow management and labour to negotiate their own settlements’ (Europe, 21 May 1994:13). It is up to them to ‘determine by agreement the nature, composition, the function, mode of operation, procedures and financial resources…as to suit their own particular circumstances’ (European Works Councils Directive, preamble). In particular, the social partners may choose a more decentralised approach compared to the European Works Council. Such a body has to be established if, after unsuccessful enterprise-level negotiations, the Directive’s subsidiary minimal provisions come into play. This is, however, only after three years of unsuccessful bargaining (except for extraordinary cases of a blank refusal to negotiate by the management). Neither do the obligations of the Directive apply if the enterprise-level negotiators jointly agree thereon, nor do they apply to companies already having an agreement which provides for transnational information and consultation of their workforce. Management and labour representatives may even jointly decide to renew

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such arrangements should they expire (without any deadline being mentioned). For management, the conclusion of such pre-emptive agreements before the European Works Councils Directive came into force was attractive with a view to settling on comparatively lower standards. But also for labour, there was a certain incentive to agree in order to have any information and consultation at all prior to 1999 (the end of the threeyear period for negotiations after the implementation deadline of the Directive). The politics of the European Works Councils involve decision-making on at least three levels: European, national and subnational. This may well shed light on a prospective system of European industrial relations emerging under the post-Maastricht social policy rules: agreements between the European top federations on future social or labour law issues might be followed by national implementation and by enterprise-level agreements. At all levels, ‘social dialogue’ may play a central role: the Social Agreement actively promotes collective agreements instead of (or predetermining) legislation; it explicitly mentions the possibility of having the social partners implement relevant EC Directives instead of the national governments; at the lowest level, finally, management and labour might decide further aspects in the enterprise (and the European Works Councils Directive even systematically builds on decentralised negotiations and provides for transnational structures for that purpose).130 Implementation may be seen not as a stage separated from policy-making, but rather as the continuation of policy formulation by other means (Majone 1995). In the case of the European Works Councils Directive, what is technically implementation, constitutes the continuation of decision-making, in the narrow sense, down to the lowest level because even the very basic standards of the Directive (i.e. that there should be information and consultation of the workforce in big transnational companies) may be reversed by enterprise-level agreement. At a conference on European Works Councils organised by the ETUC on the second anniversary of the Directive, 22 September 1996, Commissioner Flynn reported that over 200 agreements had already been signed. He said this was ‘very satisfying’ (Europe, 4 October 1996: no. 28). The Commissioner welcomed the fact that many multinationals based in the UK had included British workers in agreements establishing European Works Councils. ETUC Secretary-General Gabaglio commented that the European Works Councils Directive was ‘an indisputable success for the future of industrial relations’ and that there was an obvious difference between ‘the attitude of the government of Mr. Major, who signed the optout, and rejection of this opt-out in reality’ (Europe, 4 October 1996: no. 28). He concluded: ‘There is no going back, industrial democracy has

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become an integral aspect of the European social model and a feature of relations between the social partners at European level’ (ibid.). 4.1.6 The lessons to be learnt The Works Council case shows that the new Treaty basis allowing for QMV actually mattered. In order to promote an agreement between both sides of industry, the Commission was willing to sacrifice something in terms of standards. Thus, its proposal was even less far-reaching than the former Council presidency’s compromise proposal which had still aimed at including the British delegation in an overall EU agreement. A collective agreement having failed, the Commission went on to redraft and submitted a somewhat more demanding draft Directive to the eleven Council members according to the Social Protocol.131 By proceeding along those lines, Commissioner Flynn enjoyed considerable leeway to strategically influence the negotiations both between the industrial federations and within the members of the Council. In the first case, the Commission draft presented some kind of ‘minimum standard’ which the ETUC could trust to become legally binding in case of nonagreement with UNICE and CEEP. It seems that the comparatively lower standards aimed at pressing the ETUC to negotiate and at limiting the distance to be bridged between management and labour. In the following Council negotiations, the member states could only depart from the Commission proposal by unanimous decision—which was hard to be found for such a contentious issue. Therefore, the Commission used its powers to press for comparatively higher standards. To sum up, the Commission clearly demonstrated that it is planning to play as active a role in policymaking under the innovative post-Maastricht rules as in any other case. Concerning the Commission’s tactics in this first case of Social Agreementbased negotiations between the social partners, UNICE strongly criticised the fact that the Commission had already presented a text very similar to a draft proposal so that employers no longer felt free partners in an open process of negotiations with labour any more: ‘It cannot be so if the Commission fixes in advance what it will do in the case of disagreement, that is, that it will follow the trade union solution’ (Europe, 11 February 1994:15). UNICE felt that the Commission, by including minimum provisions in its draft, had prejudged the negotiations between the social partners. Functional spill-over finally occurred, in the sense that market integration prompted collaboration in the related area of worker consultation (see section 1.1.1). However, the birth of the European Works Councils Directive was by no means automatic.132 It was a cumbersome process whose positive result depended on the innovative Treaty basis in the Social Agreement:

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‘successful spillover requires prior programmatic agreement among governments’ (Keohane and Hoffmann 1990:287). However, regulative action at the European level was eventually restricted to transnational circumstances in the most narrow sense, with more ambitious ideas sacrificed for the sake of compromise between the member governments. The 1990 Commission proposal (OJ 91/C 39/10) excluded all provisions which were not specifically connected to transnational circumstances, to prevent conflict with existing national provisions (even before the ‘subsidiarity principle’ came into force with the Maastricht Treaty; see also Hall 1992; 1994). As opposed to other issues of European social policy (e.g. young workers, pregnant workers, working time), the argument that differing national rules lead to distortions of competition per se was not sufficient to make EC-level social intervention agreeable to the necessary number of governments (see Table 2.1; it should, however, be mentioned that in Spring 1997, the Commission started social partner consultations under the Social Agreement on the issue of national consultation of workers; see section 4.4). All in all, it seems that the European Works Councils issue was a significant step towards a European industrial relations system. First, because it set up a multilevel structure for labour and management to meet and negotiate in the future. Second, because the first run of the quasi-corporatist procedures was in fact more successful than one could expect. From a pessimist perspective, the end of the ‘talks about talks’ (Gold and Hall 1994:181) on a Euro-agreement on transnational worker consultation might have been interpreted as yet another indicator of the impossibility of ‘contractual Europe’. That neither of the Euro-federations wanted to publicly accept responsibility for the failure to strike a bargain was, however, an indicator of the changed climate under the Social Agreement. If we accept that the normative validity of an idea can be inferred not only if actors try to legitimise their behaviour by referring to the principled idea, but also if they apologise (Risse-Kappen 1995:13; see section 1.1.7), it seems that the ‘social dialogue’ ideal had already gone through a significant process of sedimentation quite briefly after the Maastricht social policy regime had come into effect. The Portuguese attitude points in the same direction. Despite the abstention there were multiple affirmative references to the principle of ‘social dialogue’, notably at Community level. Social dialogue as a social institution thus helped to ‘construct a shared belief system that defines for the community what actions constitute cooperation and defection’ (Garrett and Weingast 1993:176). As far as the system of interest representation at the European level is concerned, the Works Councils case revealed two significant results. On the one hand, it is so far the big cross-sectoral federations which actually negotiate on potential collective agreements (this is also true for bargaining on parental leave in

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1995). In the phase of negotiations under the Social Agreement, we therefore see a much less fragmented system of interest intermediation than is usually anticipated (e.g. by Obradovich 1995). On the other hand, the new procedures under the Social Agreement create strong incentives for intra-federation reforms which increase the chances of consensus in the future (see Chapter 5). Most importantly, an internal UNICE agreement in the aftermath of the unsuccessful talks on European Works Councils specified that the CBI would in the future participate but not have a veto right in negotiations pursuant to the Social Agreement (see section 5.1). In general, it is important to keep in mind that the negotiations on European Works Councils took place under rather difficult circumstances, including a long controversial history at the European level. Furthermore, the ETUC had initially announced that it preferred legislative action for the still pending proposals of the Commission’s 1990 Social Action Programme (see M.Rhodes 1995a:117). It was known that the majority of relevant governments were willing to adopt the European Works Councils Directive under the Social Agreement. Last, but not least, the case of the European Works Councils Directive revealed that, even in the absence of a final agreement by the social partners, their positions were referred to by Commission and Council delegations. For example, the Commission argued that it would not take over most of the EP’s amendments in the first reading because it wanted to stick as closely as possible to the existing Council compromise at eleven and to the social partners’ ‘approached standpoints’ (i.e. the text of pre-agreement almost signed by them, see below; EuroAS, 6/1994:4; Europe, 6 May 1994:11). Furthermore, the Commission published the various social partner institutions’ statements submitted during the double consultation process in the annexe of its later proposal to the Council. The Portuguese Council delegation explicitly referred to them when it came to the final decision. All this seemed promising for future cases without such a long-standing history of negotiations at the Council level. 4.2 The second case: parental leave In the second case under the Social Agreement, the preconditions for Euro-collective negotiations were more favourable than they had been for European Works Councils. The issue of parental leave was perceived by the relevant interest groups as a comparatively easy subject. No crucial policy issue was at stake in the eyes of either ETUC, UNICE, or CEEP. In the words of a Commission official, parental leave seemed a suitable ‘guinea pig’ for Euro-level collective negotiations. Moreover, the then forthcoming intergovernmental conference preceding the Amsterdam Treaty had the incorporation of the Social Agreement

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in the Treaty and a possible redrafting on its agenda. This put the social partners under considerable pressure to prove that they could live up to the Eurocorporatist procedures which they themselves had proposed during the Maastricht negotiations. Indeed, the Council report on the functioning of the Union (see point 41, SN 1821/95, 14 March 1995), which served as a major input for the IGC, explicitly noted with a view to the Social Agreement that the dialogue of the social partners at the European level had not yet succeeded in the establishment of a collective agreement. The Commission, too, put significant pressure on the social partners ‘who must show that the European constitutional legislator was right to trust them and give them considerable coregulatory power’ (Commission President Delors at the eighth ETUC Congress, quoted in Europe, 10 May 1995:11). 4.2.1 The background to the parental leave negotiations The first Commission proposal on a Directive concerning parental leave and leave for family reasons is dated as early as 1983 (COM [83] 686 final). On the basis of the argument that the quite diverse national provisions were thought to hamper the harmonious development of the Common Market, an approximation on the basis of Article 100 of the EECT was suggested. The minimum standards suggested were: three months of parental leave for either parent (to be taken up to the third birthday of the child), and an unspecified number of days off for family reasons to be decided by the individual member state. Concerning social insurance and pay, leave for family reasons was to be treated as paid holidays. By contrast, pay or an indemnity for parental leave was only an option, to be paid by public funds. The Commission advocated an unequivocal nontransferability of these rights. Due to mainly British opposition a unanimous adoption was impossible. Finally, the draft was put aside for almost a decade. In 1993, the Belgian Council Presidency ‘tried to give social Europe back its wings’ (Danish Social Minister Smet quoted in Europe, 25 November 1993:9). One of its initiatives consisted of drafting a new compromise proposal on parental leave. During the Social Council’s November session, the UK reportedly tried in vain to gain a derogation from the Directive, then restated its opposition. In addition, Luxembourg opposed the proposal, pointing to its much higher national standards. The other member states seem to have supported the draft (see EIRR 240:24). At one point, a lowestcommon-denominator solution seems to have emerged: the UK wished that parental leave be only granted to mothers, not to fathers. It seems the fact that only the Irish delegation and the Commission were immediately against this ‘awful’ (a Commission official, interview) change made the Commission threaten to bring in the ECJ on sex discrimination grounds.

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Fruitless negotiations continued until autumn 1994. Despite consensus among eleven delegations in the last relevant Council debate on 22 September 1994 deliberation was still not possible due to a British veto (e.g. Hornung-Draus 1995:148; Social Europe, 3/1994:62). This was the classic situation for an application of the Maastricht Social Agreement, which had by then already been in force for almost a year. 4.2.2 The negotiations under the Social Agreement Consultation of labour and management on the issue of ‘reconciliation of professional and family life’ pursuant to Article 3.2 of the Social Agreement was started by the Commission on 22 February 1995. The Commission’s consultation document outlined the importance of an initiative in the light of changing employment roles of men and women. It argued that all twelve member states had taken measures which offered varying leave conditions, ranging e.g. from 3 (Greece) to 36 months (France, Germany) of parental leave duration. In principle, the Commission stated that the specific objectives of promoting reconciliation between family and professional life, laying down minimum standards of protection and establishing common rules ensuring fair competition within the Community cannot be sufficiently achieved by the Member States acting alone and can therefore by reason of the scale and effects of the proposed action, be better achieved by general framework arrangements operating at Community level. (first consultation document: 5) In addition to national legal provisions, the Commission noted advances made on a voluntary basis by the social partners ‘in practically all of the Member States’ and therefore voiced the belief that ‘the social partners should explore the widest possible range of issues relating to reconciliation’ (ibid.: 4).133 The Commission underlined its desire for a conventional solution of the issue by providing special services to the social partners: The Commission considers that discussion between the social partners on this issue could be facilitated not only through the body of research which exists at national level, but also through contacts with the public bodies and agencies which specialise in equality issues…. In order to make such contacts easier, a list of the addresses of national bodies represented on the Commission’s Advisory Committee on Equal Opportunities between Women and Men is annexed to this document. (ibid.: 6)

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Seventeen interest groups reportedly responded within the six-week deadline. According to Commission sources (COM [96] 26 final, explanatory memorandum) the answers revealed support for the promotion of equal opportunities as well as a consensus in favour of Community action on the subject, at least in the form of a recommendation. The general opinion was described to have been that the social partners have to play an active role in drawing up the fundamental principles, and then in their implementation through collective bargaining. In fact, interviews reveal that an advocacy coalition (see Sabatier 1993) comprising of Commission officials as well as members of the Brussels offices of the major interest groups had already done backstage work with a view to arriving at an agreement in this case. This is also expressed by the fact that relevant negotiation mandates were already being drawn up when the first round of consultations was still running. ‘This proposal provides an opportunity to put into practice the Social Protocol. Such negotiations should enable us to test out the procedure from A to Z, i.e. right up to a Council Decision’ (interview with ETUC official, March 1995). Respecting the deadlines was considered of major importance, also within UNICE. On 21 June 1995, the Commission launched the second round of consultations. This time, it issued another consultation document but not an outright legislative draft such as in the Works Councils case. It put forward a number of principles, e.g. that parental leave is a right linked to employment; that the length of parental leave should be at least three months; that some flexibility was desirable in the implementation; and that social security rights should be maintained during the leave (see Europe, 22 June 1995:14; EIRR 259:30). Already about two weeks after the start of the consultation, on 5 July 1995, the three major cross-sectoral federations—CEEP, ETUC, and UNICE—asked for a suspension of the legislative procedure in a joint letter to the Commission (Europe, 8 July 1995:7). They expressed determination to reach agreement in 1995, and their ‘wish to prove that they are capable of reaching binding agreements in the framework of negotiations’ (Europe, 13 July 1995:15; see EIRR 259:30). Indeed, they had, behind the scenes, already agreed on a schedule which envisaged an agreement by October 1995, i.e. before the start of the IGC. For the first time, formal collective negotiations under the Social Agreement were opened. The participants’ preferences in terms of outcome are shown in Table 4.3. The strict intention to find a compromise even led to an interesting procedural approach: the chair of Belgium’s bipartite National Labour Council, Jo Walgrave, was chosen as a ‘neutral umpire’. She facilitated the negotiations by skilfully giving overviews on the disputed details, by encouraging breaks of the meetings for intra-group reflection, and by drafting

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Table 4.3 The preferences in the parental leave collective negotiations

the protocol of preliminary results of the negotiating rounds (interviews with participants of the negotiations). Numbers of members of the plenary negotiations were rather large: approximately 50 persons, half employers and half employees. The delegations consisted of one representative of each EU and EEA member state’s employers’ and employees’ federations, respectively, and representatives of the Euro-level federations (representatives of ETUC, UNICE, CEEP and of major organisations within these umbrella groups, e.g. Euro-FIET134 as an ETUC member). It is important to mention that in the negotiations on parental leave (as opposed to the preceding talks about European Works Councils), the British CBI participated as an observer only in UNICE’s team. Because parental leave was considered a ‘women’s issue’, the negotiating teams included significantly more women than they would probably have otherwise (and as they have in the case of the social partner talks about Works Councils). This is specifically true for the ETUC where female representatives accounted for about 50 per cent.135 After each of the six meetings at top level (each preceded by a preparatory meeting between employers and employees respectively), the delegates reported back to their home institutions with a view to receiving guidelines concerning the forthcoming meeting. The collective negotiations were successfully concluded after only five (of possible nine) months, on 6 November 1995. A draft framework agreement was submitted to the respective decision-making bodies of the three institutions (Europe, 8 November 1995:15 and 11 November 1995:12). With a view to the implementation, the ETUC, U N ICE and CE E P requested the Commission submit their framework agreement to the Council for a decision making the requirements binding in the member states of the Union with the exception of the UK.136 Soon after the formal signature of the

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Agreement on 14 December 1995 the Commission proposed a draft Directive to the Council with the aim of rendering the provisions of the Agreement concluded between the social partners binding (on 31 January 1996; see Europe, 1 February 1996:7). Reportedly, the draft was a matter of controversy in the Social Affairs Council (see Europe, 29 March 1996:8). For some delegations, the content of the framework Agreement left too much room for interpretation, making proper application in the member states a difficult task. Others thought that the social partners had ignored the powers of the EC institutions by introducing a non-regression clause and a time limit for implementation. Some member states claimed strictly national competence for social security. They criticised the fact that management and labour had (although only as a general consideration) formulated that the member states should provide for the maintenance of entitlements under sickness insurance and that they should consider the maintenance of entitlements to social security benefits during parental leave (interview with ETUC official). Nevertheless, a political consensus was reached on 29 March,137 and the Directive was formally adopted without debate on 3 June 1996. 4.2.3 The results The Agreement entitles men and women workers to parental leave on the grounds of the birth or adoption of a child. This is to enable them to take care of that child for at least three months. After the leave, the workers have the right to return to the same job, or, if this is not possible, to an ‘equivalent or similar job consistent with their employment contract or employment relationship’ (clause 2.5). Acquired rights have to be maintained as they stand until the end of the parental leave and to apply again thereafter. For an overview of the Agreement, see Table 4.4. The Agreement sets out only a few minimum requirements and leaves to member states and national social partners the establishment of the conditions for access and the modalities of application of the right to parental leave. ‘In order to take account of the situation in each Member State’ (general consideration no. 9), the member states and/or social partners may for example: • define a given age up to eight years until when parental leave may be taken; • decide whether parental leave is granted on a full-time or part-time basis, in a fragmented way or in the form of a time-credit system; • make the entitlement to parental leave subject to a period of work qualification and/or length of service qualification which shall not exceed one year;

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Table 4.4 The Parental Leave Agreement (overview)

• adjust the conditions for access and the modalities of the application of parental leave to the special circumstances of adoption; • establish notice periods to be given by the worker to the employer; • define the circumstances in which an employer is allowed to postpone the granting of parental leave ‘for justifiable reasons related to the operation of the undertaking’; • authorise special arrangements to meet the operational and organisational requirements of small undertakings (clause 2); • take the necessary measures to protect workers against dismissal on the grounds of a (claim for) parental leave; • define the status of the employment relationship during the period of leave; • When it comes to the Agreement’s provisions on time off from work on grounds of ‘force majeure for urgent family reasons in cases of sickness or accident making the immediate presence of the worker indispensable’, it is in fact left only to the member states and/or social partners to entitle workers respectively, ‘in accordance with national legislation, collective agreements and/or practice’ (clause 3.1). These actors may furthermore specify the conditions for access and the modalities of application of clause 3.1 and limit this entitlement to a certain amount of time per year and/or per case.138 It seems that devolution was chosen as a compromise solution on those issues where labour and industry found it difficult to agree on. The social partners are said to be ‘best placed to find solutions that correspond to the needs of both employers and workers and shall therefore be conferred a special role in the implementation and application’ of the Agreement. Thus we see a specific

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pattern of ‘subsidiarity’, such as in the case of the European Works Councils Directive: only a few and rough minimum conditions are set out at the EU level, whereas the member states and sometimes even sub-national units decide on further specification (e.g. micro-corporatist arrangements at the enterprise level). An innovative aspect as compared to the Works Councils Directive is the fact that the framework Agreement on parental leave explicitly allows for further agreements at the European level, adapting and complementing its provisions with a view to taking into account particular circumstances (clause 4.3). Thus, the decision-making process is envisaged to proceed in horizontal and vertical ‘cascades’ falling from the supra- to the national and subnational arenas, and from the cross-sectoral to the sectoral and possibly even enterprise level. The social partners are envisaged to potentially be the decisive actors at all levels. Evaluating the content of the Agreement, the reformist potential in terms of gender relations is crucial. The general considerations of the text reveal that parental leave is seen as an important means of reconciling professional and family responsibilities and promoting equal opportunities and treatment between men and women. The ‘EC social partners’ state that men should be encouraged to assume an equal share of family responsibilities. For example, they should be encouraged by means such as awareness programmes to take parental leave. The granting of an individual right to parental leave and to leave for family reasons might well indeed constitute an incentive, specifically if this right is non-transferable to the female partners. However, much will depend on the goodwill of the national governments and/or social partners because the Agreement itself is not unequivocal on the point of non-transferability: only ‘in principle’, the signatories considered that the right to parental leave should be granted on a non-transferable basis (clause 2.2). Also the lack of a specific reference to any sort of minimum income during parental leave will certainly limit the Agreement’s effects. The popularity of parental leave, above all among fathers, seems to depend on whether it is paid or not. Only in Sweden, where pay during the leave is an earnings-related benefit and where at least one month of leave must be taken by either parent, a significant amount of men take up their right to parental leave (see EIRR 262:15). The employers seem very satisfied with the framework’s flexibility and with the possibility to allow employers to postpone parental leave if necessary, in the process of national implementation (see Hornung-Draus 1996:5). That no reference to a minimum allowance or income was agreed is a victory for UNICE and CEEP, but a major regret of the ETUC (see Lapeyre 1996:124). The same is true for the issue of time off in order to care for elderly people which is not explicitly mentioned in the Agreement but was an important stake for the unions. However, the employees’ representatives are happy to have turned down employers’ desire for

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thresholds (to restrict the right to parental leave to companies with at least 50 employees, or to companies where no more than 1 per cent of employees are already on leave; interview with ÖGB representative). The amount of time which the Agreement sets as a minimum for parental leave is comparatively low (three months). Indeed, it represents the lowest amount granted in any of the countries with a statutory right for parental leave, i.e. in Greece. However, the granting of such an entitlement is an innovation in Ireland and Luxembourg (where no such statutory right existed), and in Belgium (where the employer’s consent was needed (Europe, 11 November 1995:12; EIRR 262:16). There are also countries, e.g. Germany, where the right to parental leave was traditionally dependent on the partner’s professional status (Hornung-Draus 1996:5). The flexibility of parental leave as potentially allowed in the Agreement (but this is to be defined at the lower levels) is an innovation for various countries. Often the leave must be taken when the child is very young (e.g. Norway, Spain, Austria, France, Germany) or immediately after the maternity leave (Finland, Greece, Italy, Portugal). Furthermore, the possibility for part-time leave, and for leave in a fragmented fashion or in the form of time-credits would often be innovative (the former for Greece, Italy, Portugal, and Spain; the latter for Austria, Norway, and the Netherlands; see Europe, 11 November 1995:12). Concerning leave for force majeure reasons, the provisions seem to improve the status quo only in Ireland where so far no such statutory right exists (and in the UK which was originally outside). De facto, however, even in Ireland many enterprises already grant time off for such reasons (EIRR 263:23). By and large, the importance of the Parental Leave Agreement is therefore in its existence rather than in its contents. The symbolic importance of the first collective agreement at the EU level which opened up the conventional route for EC social policy compensated for the fact that the agreed minimum standards were low. This becomes even more evident if one looks at the history and the conditions under which this Agreement was negotiated, and if one appreciates the fact that important clarifications as to the procedures under the Social Agreement were reached (see below). Nevertheless, when evaluating the contents of the Part-Time Agreement it is important to keep in mind that even the original Commission proposal had not suggested particularly far-reaching standards, either. It has been speculated that when ‘surprising friend and foe by signing’ this agreement, UNICE had in fact calculated that this agreement was more flexible than pending EU regulation and that the ETUC had accepted something particularly weak on wage compensation during leave of absence (Ebbinghaus and Visser 1997b:17). The evidence of a direct comparison of the Commission’s original proposal and the collective agreement suggests

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that the agreement actually does not fall far behind even if compared to the 1983 Commission draft (see Table 4.5). In any case, its standards are higher than various compromise texts which had been discussed in the Social Council briefly before the Social Agreement was employed as a new legal basis (see also Dølvik 1997:56). Table 4.5 Comparison of the Parental Leave Agreement and the Commission’s 1983 proposal

4.2.4 The lessons At the general level, the Parental Leave Agreement/Directive revealed that the post-Maastricht social policy procedures are workable. In the words of a Commission official, ‘a taboo was broken’ with this first substantive collective agreement which had ‘a pedagogical effect that there is a possible win/win situation under the Social Agreement’. The signing of the first collective agreement and the adoption of the Parental Leave Directive in the Social Council of June 1996 were much celebrated events and served to underline the great symbolic value attributed to the success of the new procedures. The formal signature of the Parental Leave Agreement was attended not only by the presidents and secretariesgeneral of ETUC, UNICE, and CEEP, but also by the EC Commissioner for social affairs. In a joint declaration with Commission President Santer, Flynn welcomed the

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Also ETUC Secretary-General Gabaglio underlined the broader political significance of the Parental Leave Agreement. He noted that the signature proved that the Social Protocol was well founded and that it was a major point supporting the ETUC’s claim to integrate this Protocol into the Treaty at the 1996 IGC (ibid.). The signatories emphasised the fact that they had opened up the conventional route which was to be pursued in the future: Gabaglio considered this first agreement as ‘the point of departure for the establishment of a European industrial relations system as required by the single market and European economic integration’ (indirect quote from Europe, 15 December 1995:9, emphasis added). CEEP President Castellano also thought that the signature was a ‘remarkable progress that will…signify that other agreements may be reached’ (quoted in Europe, 16 December 1995:9). Similarly, UNICE President Périgot stated that ‘this negotiation proves that there is a contractual space at the European level that there must be a will to take care of’ (quoted in Europe, 16 December 1995:9, emphasis added). At the more specific level, the Parental Leave Agreement brought about crucial decisions with a view to both the procedures and the central actors of post-Maastricht EC social policy. 4.2.4.1 The implementation of a collective agreement The most unclear element of the Social Agreement had been the provision that a collective agreement may, on a Commission proposal, be implemented by a ‘Council decision’ (Article 4.2). In its Communication on the Implementation of the Social Agreement (COM[93] 600 final: pt 39), the Commission announced it would take into consideration, on such an occasion, several elements: the representativeness and mandate of the signatory parties; the legality of the Agreement’s provisions in terms of Community law; and its adequacy in the light of the Social Agreement’s provision on small and medium-sized enterprises.139 With a view to the contents of the Agreement, the Commission announced it would add to any relevant proposal to the Council an evaluation and an elaborate reasoning.140 It came as no surprise to the interested public that the

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Commission stated that it ‘wholeheartedly endorses the aims of the social partners’ agreement’ and that it considered all necessary conditions to be fulfilled to allow it to be submitted to the Council (see explanatory statement to the proposal on the implementation, COM[96] 26 final: pt 26). Probably the most delicate question about the implementation of collective agreements by EC law was the choice of the adequate legal instrument. The Social Agreement itself left open various interpretations, because the term ‘Council decision’ may be understood in its narrow sense (thus referring to the Decision as mentioned in Article 189 ECT, i.e. a Council act which is binding for its specific addressees) as well as more widely (thus allowing for any legal instrument available to the Council). Within its right of initiative, it is up to the Commission to propose the specific legal form of an envisaged Community action. The case of the Parental Leave Agreement has indeed revealed the Commission’s choice of interpretation. The notion of ‘decision’ in the Social Agreement accordingly refers to one of the three binding legal acts mentioned in Article 189 ECT (i.e. Regulation, Directive, and Decision). It is up to the Commission to propose to the Council the most appropriate of the three in each single case. With a view to the Parental Leave Agreement’s character as a framework agreement, the Commission seems to have endorsed the view of the Council’s legal service141 that the ideal form of its implementation was a Council Directive (ibid.: pt 33). The Commission furthermore decided that the Council ‘decision’ (in the larger sense) should be restricted to making the provisions of the Agreement binding. The text of the Parental Leave Agreement should therefore not even be included in the Directive itself, but rather be annexed to it (ibid.).142 This decision is noteworthy because, in fact, the formulation that a collective agreement had to be implemented by the Council as it stood had been eliminated during the intergovernmental conference preceding Maastricht (see section 3.2.2). This indicates that the primary law might have allowed the Council to further elaborate unclear or unspecified provisions. The Commission’s proposal was nevertheless acceptable to the Council which even unanimously agreed on it. The legal base of the Directive was Article 4.2 of the Social Agreement which allows for Council actions based on a qualified majority for matters included in Article 2.1 such as ‘equality between men and women with regard to labour market opportunities and treatment at work’. In addition to implementation via the Council (and later on by the single member states), the Agreement allows for a further implementation via agreements between social partner organisations: ‘The present agreement does not prejudice the right of the social partners to conclude, at the appropriate level including European level, agreements adapting and/or complementing the provisions of this agreement in order to take into account particular

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circumstances’ (clause 4.3). At least in the area of commerce, some efforts were made in this direction. The relevant employers’ federation, EuroCommerce, was reportedly, before the signature of the CEEP/ETUC/ UNICE Agreement, ‘keen to seek negotiations’ (EIRR 266:26) on the issue with their labour counterpart, Euro-FIET (a member of the ETUC). The latter organisation refused to negotiate while the ‘big three’ were still working on their framework agreement (after intense intra-ETUC struggle; see Ross 1997:13; Dølvik 1997:53), but changed its attitude after the Parental Leave Agreement was signed. In a joint letter to the Commission, EuroCommerce and Euro-FIET indicated their intention to negotiate a Parental Leave Agreement (EIRR 266:26). Nevertheless, there was no follow-up.143 It seems that UNICE strictly rejects sectoral agreements. According to ETUC sources, no sectoral collective agreements under the Social Agreement are to be expected in the near future. 4.2.4.2 The role of the EC institutions The parental leave case made it obvious that the European Commission is indeed a major player under the post-Maastricht social policy rules. It is influential both at the more general level of the definition of principles for the management of the new provisions, and at the level of detailed bargaining on single issues. Shortly after the Social Agreement came into effect, the Commission indicated in its Communication on the implementation of the Social Agreement (COM[93] 600 final: see pts 12, 16, 15) three important details concerning the future procedures: that it would submit to the Council any social partner agreement in its exact wording; that it would withdraw its proposal in case the Council wanted to amend the text of the Agreement; and that it would give the EP the chance to issue an opinion on its proposal. The Parental Leave Agreement and Directive made it clear that, indeed, the Commission’s ideas were implemented. When it comes to single issues under the post-Maastricht social policy rules, the Commission’s power of initiative is de facto extended to the corporatist procedures. Although, legally, the social partners could independently agree on anything they might want to, the collective negotiations (at least so far) need triggering on the part of the Commission. Against the hopes and demands of the trade unions, the employers restricted the scope of the social partner negotiations to the social policy proposals of the Commission.144 Even concerning the substantive outcome of collective negotiations, the Commission has a great deal of bargaining power. Although it does not directly participate in the collective negotiations, it supplies the social partners with a document that constitutes the starting

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point and basis of their talks. In the Works Councils case, this text was as specific as a draft Directive. Indeed, industry complained that the Commission had pre-empted the negotiations. From the failure of the ‘talks on talks’ on Works Councils, the Commission seems to have learned a lesson. In the parental leave case, the document submitted in the second round of interest group consultation was less specific. Furthermore, the Commission was less pushy concerning the deadlines. Although allowing for only six weeks (such as in the Works Councils case) during the first round of consultations, which ran out by end of March 1995, the Commission only started the second phase by late June, thus giving the interest groups a time cushion to prepare their negotiations. Another important feature of Commission influence is that the Council may only implement a collective agreement on a proposal by the Commission. This gives the Commission a gatekeeping function which might, if necessary, be tactically used also to influence the negotiations. It is common wisdom that the Commission is well informed on the development of collective negotiations. Although the Commission is not formally represented at the bargaining table, it happens that the secretary to the ‘neutral umpire’ and chairperson is a Commission employee.145 Among the traditional policy-making institutions at the European level, the European Parliament seems most negatively affected by the new procedures under the Social Agreement. The ETUC, UNICE, and CEEP did not, in their 1991 Agreement, provide for consultation or participation of the directly elected representatives of the European citizens within the suggested legislative route via collective agreements. What is actually more noteworthy is the fact that also the Maastricht negotiators did not give the EP a right to be consulted if a social partner agreement is to be turned into EC law. The 1996–97 IGC did not even discuss a prospective improvement to this situation when including the Social Agreement in the Treaty.146 It can thus be no surprise that the EP did not give a wholehearted welcome to the post-Maastricht social policy procedures. In its Report on the new social dimension of the Treaty on European Union (PE 205.366/ II/fin., 18 February 1994), it stated that ‘despite its defects and ambiguities concerning social policy’, the Maastricht Treaty would enable some progress to be made towards completing the social dimension (consideration A). However, the EP deplored the ‘weakness of the role assigned to the European Parliament in the legislative process in the whole social sphere’ (B), and that the Social Agreement ‘significantly alters the role played by the signatory institutions in the legislative process’ (D). Therefore, the EP urged an agreement between the Community institutions on the application and implementation of the Social Agreement (point 2)—what was never accepted by the other EC institutions.

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At least, the Commission usually allows the EP to issue an opinion. The Parental Leave Agreement was indeed welcomed by the EP in its plenary session of 14 March 1996. It was seen as a ‘fundamental breakthrough in this important aspect of equal opportunities policy’ (quoted from EIRR 267:3. See also Europe, 2 March 1996:8; 13 March 1996:10). The contents, however, were thought to be a first step only. Four issues were listed which were not or inadequately covered: sufficient financial support; extension to the period of leave of rights enjoyed; promotion of replacement of workers on leave in order to provide new temporary employment opportunities; and the right to social security benefits during leave. These issues should, according to the EP, be regulated by supplementary EC legislation. Concerning the essential question of implementation, the EP agreed that the Agreement should be submitted to the Council. If the governments did not make it binding, the EP expressed its ‘expectation’ that the social partners would implement it via collective bargaining. Regarding the legal instrument proposed by the Commission, the EP considered that a Decision would have allowed for swifter implementation in the member states. As opposed to the EP, the Council has an important role to play even on the contractual path to EC social policy, both formally and informally. Clearly, the national governments’ delegations are crucial when it comes to implementing agreements by means of EC law. The alternative, i.e. implementation by the social partners themselves, is hardly viable due to legal as well as practical difficulties in many member states. Furthermore, the case of the Parental Leave Agreement may be read as an example that a high probability of Council deliberation on a matter (there had been consensus among all delegations except the UK before the opening of the negotiations) represents a ‘whip’ for industry to actively look for a compromise with labour. Because the goals of labour and management concerning European social regulation and policy are often opposing, and the preference of management is usually non-intervention, no ‘corporatist’ success stories seem probable in the open absence of (at least near) consensus at the Council level. To sum up: the Commission as well as the Council kept their crucial roles in the innovative procedures in post-Maastricht social policy. This is not so for the EP which under the contractual route was replaced as a co-decisionmaker by the ‘social partners’. Compared to the Works Councils case, two features have crucially facilitated agreement between the ETUC, the UNICE, and the CEEP on the issue of parental leave: that the Commission gave more leeway to the negotiators; and that the CBI was only an observer without veto rights. Additional external pressure originated from the then forthcoming IGC which might—in the absence of success—have put an end to the ‘Euro-corporatist’ patterns under the Social Agreement.

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4.3 The third case: atypical work If ‘the proof of the pudding is in the eating’, the parental leave deal had indeed shown that the post-Maastricht social policy provisions are operational. However, the issue of parental leave had been considered rather uncontroversial. By contrast, the issue of atypical work is at the heart of the contemporary debates on deregulation/flexibilisation versus worker security in the wider sense. Therefore, chances seemed none too good for another collective agreement, at the outset. However, political developments put pressure on the negotiators: in addition to the ongoing IGC, the Renault affair147 brought to the attention of the wider public the question whether European economic integration was sufficiently counterbalanced by social policy rules. According to the chairperson of the social partner negotiations, Walgrave, it reinforced the feeling of responsibility of the social partners that the impression of an imbalance between economic and social integration might lead to disaster.148 4.3.1 The background As early as 1982, the European Commission had suggested that the EC intervene in the field of part-time and temporary work.149 It aimed at protecting part-time workers against discrimination by granting proportional claims on remuneration and holiday/redundancy/retirement payments. Furthermore, an obligation to conclude written labour contracts and preferential treatment for part-time workers in case of a possibility of taking up full-time employment were provided for in a draft Directive on the implementation of the laws on voluntary part-time work (OJ 82/C 62/7). Another Directive was proposed on temporary employment and fixed-term contracts, suggesting that such atypical work be used in exceptional cases only. It provided for social protection to be equal to that offered to permanently employed persons (OJ 82/C 128/2). The general thrust of the Commission was to restrict atypical work as much as possible and to protect those working under such conditions. These proposals found an extremely hostile climate in the Council and had no chance to be adopted. The second text was reportedly ‘never… discussed in detail by the competent Council group’ (COM [89] 568 final: 15). Nevertheless, the Commission did follow up on the issue. The 1989 Social Charter (pt 5.b.) provided that workers without a standard full-time contract should receive an equitable remuneration. Under the heading of improvements to living and working conditions, it was postulated that the realisation of the Internal Market had to lead to improvements for the workers. This process was thought to need the implementation of laws concerning working time and atypical work (point 7) in particular.

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In its Communication on an action programme implementing the Charter, the Commission announced it would update its 1982 proposals. It stated that ‘there should be a Community framework ensuring a minimum of consistency’ between the various forms of atypical work contracts ‘in order to avoid the danger of distortions of competition and increase the transparency of the labour market at Community level’ (COM [89] 568 final: pt 2.a). The Commission thus combined the issue of atypical work with European economic integration, and asked the Council to follow the logic of spill-over to the labour law area. If this aspect continued along the lines of the early 1980s, the basic view on atypical work had significantly shifted: even if what are termed ‘atypical’ forms of employment are contested in some quarters, they nonetheless constitute an important component in the organization of the labour market…. This proposal would therefore lay down at Community level minimum requirements, concerning working conditions and social protection in particular. (COM [89] 568 final: 15ff.) Although it still suggested a limited degree of harmonisation, the Commission thus no longer wanted to restrict atypical work. In the wider context of the Internal Market Programme, the Commission proposed a package of three draft Directives. This ‘global approach’, it was argued, would improve the functioning of the Internal Market and of labour market transparency; it would improve the living and working conditions of workers; and improve the health and safety of workers (COM [90] 228 final: 2). The main reason for suggesting three legislative projects instead of one was a tactical move with a view to employing various legal bases, two of them allowing for majority voting.150 Nevertheless, only one of the proposals was in the short run yesable in the Council. On 25 June 1991, the Directive on the improvement of health and safety at the workplace for atypical workers was adopted under Article 118a EECT, in order to assure equal treatment with other workers as far as security at work is concerned (OJ 91/L 206/19). The other two drafts were much more controversial although the Commission was significantly less sceptical vis-à-vis atypical forms than ten years before. As its basic approach, the Commission stressed that the recent increase in atypical work pointed to a necessity on both the employers’ (increased competitive pressures and need for flexibility) and the workers’ side (better than unemployment; family reasons; COM [90] 228 final: 3). Nevertheless, the Commission warned that differences in social security contributions due to varying national provisions with a view to including or excluding atypical workers might lead to distortions of competition, especially in frontier

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regions (ibid.: 4). To prevent such a form of ‘social dumping’, pro-rata-temporis treatment in social security for part-time and temporary workers was suggested. Differences in pay between member states were thus not planned to be touched upon at a general level, but the more specific issue of equal treatment of atypical with full-time regular workers was. The statistical data provided by the Commission showed that, indeed, the employment of a part-time worker costs 36 per cent less in Germany than in the Netherlands while the pay for a comparable full-time employee was almost identical (ibid.: 15). With a view to increased transnationalisation of economic activity after 1992, the Commission thus considered it necessary to • harmonise social protection and social benefits with a view to part-time work; • limit the duration of temporary work contracts (up to 36 months only) and to regulate their non-justified termination; • regulate the conditions of work of agencies for temporary employment (where they are legal).151 Although the Commission offered the more reluctant member states exception from these 1990 drafts of those workers employed less than eight hours, they were soon shelved in the Council.152 UNICE had strongly rejected the argument of a distortion of competition153 which was thought to lead up to an unacceptable harmonisation of all labour costs (see UNICE position paper, 30 August 1990). As a part of its attempt to ‘revive’ these two proposals, the Belgian Presidency produced a new merged text in 1993, entitled ‘Council Directive on the Promotion of Employment and the Protection of Part-time and Fixed-term Employment Relationships’. It was discussed at the Council level from October 1993 until April 1994 with little progress made. It seems that a focus on part-time work only was being debated (interview with ETUC official). In its White Paper on EC Social Policy of 27 July 1994 (COM [94] 333 final), the Commission threatened that it would use the elevenonly procedures if there was no progress (see EIRR 248:15). In the second half of 1994, the German Presidency thus issued another, but ‘much watered down’ (EIRR 252:30) draft. This unpublished text reportedly covered part-time and fixed-term contracts (which were allowed only in the presence of objective grounds). It stated that these atypical workers should not be treated in a less favourable manner than others, unless this was justified on objective grounds (see EIRR 248:2). The new legal basis, Article 100 of the ECT, required unanimous decision-making among the (then) twelve. But British opposition in principle, on grounds of alleged negative effects on employment, was

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expressed in an outright veto by the British Employment Secretary Michael Portillo, during the Council meeting on 6 December 1994. This was despite the fact that the text had been ‘watered…down to the bare bones to get British support’ (Commissioner for Social Affairs, Padraig Flynn, quoted in The Guardian, 7 December 1994). Subsequently, the Commission announced it would re-introduce the proposal under the procedures of the Social Policy Agreement (EIRR 252:28).154 The following section will analyse the course of events in detail. This seems useful because the atypical work case was already negotiated under a well-established pattern which will be followed in future deals. Furthermore, it will help us to understand how specific standards came about in the bargaining process. (For details on the internal management of the negotiations in single interest groups and for the development of a general negotiation culture see Chapter 5.) 4.3.2 The negotiations According to Commission sources, the first round of consultations on ‘atypical work’ under the Social Agreement started on 27 September 1995.155 Under the heading ‘flexibility in working time and security for employees’, the Commission tried to reconcile employers’ needs for greater flexibility with part-time and temporary workers’ needs for job security. It asked the social partners whether they agreed that rules on the conditions of part-time work, fixed-term employment relationships, and temporary work were necessary at the EU level; which basic principles and effects these rules should have (secure fair competition between member states; equal treatment with fulltime employees; fight indirect discrimination of women); how this should be reached (binding rules, recommendations, collective agreements); which groups of atypical workers should be included (part-time, fixed-term, temporary work); and which parts of the working conditions should be covered by equal treatment (working conditions in the narrow sense, social security, social protection). It seems that 21 organisations156 answered more or less within the six weeks as scheduled.157 According to the Commission evaluation (see second consultation document), the support for the principle of non-discrimination was a general feature in the answers. While most employer organisations (including UNICE) saw no necessity for regulatory action by the EC, some of them reportedly supported the elaboration of a social partner agreement. In its answer to the Commission (dated 15 December 1995), UNICE shared the view that flexible forms of work offered a response to the needs of both companies and employees. However, UNICE disagreed with the Commission that

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the objective to be pursued in the EU is a balance between ‘the company’s interest in greater flexibility and the workers’ interest in greater security’ but rather the quest for solutions which reconcile the need for companies to have sufficient flexibility to be able to react rapidly to market developments, the legitimate desire of employees to enjoy adequate protection against discrimination, and the need to promote job creation. (ibid. pt 3) UNICE stressed that although part-time, fixed-term or temporary work could be useful for companies, use of these forms of work also involved additional costs which should be taken into account in the search for a balance (pt 4). It once again rejected the Commission’s arguments concerning distortions of competition: ‘Wage costs are a normal factor of competition. Differences reflecting the economic realities peculiar to each labour market or productivity gaps must be allowed to remain in place’ (pt 10). UNICE considered European regulations of the conditions governing flexible work unnecessary because negotiations in member states between employers and employees in line with national law and practice were the best way to achieve the objectives at stake (pt 13). In any case, different forms of atypical work should be treated separately (pt 14) and the application of the principle of nondiscrimination (which UNICE was favourable to) did not mean ‘a blanket ban on all differences’ while it was compatible with pro-rata-treatment and with the existence of some thresholds (pt 11). The ETUC, by contrast, stressed the need for a binding EC measure, e.g. in the form of a framework Directive to be supplemented by specific Directives on various forms of work (answer to Commission, dated 22 December 1995). Not only should, in particular, social security be included in the realm of non-discrimination, but furthermore professional training, career development, freedom of coalition and occupational social security should be explicitly included. The ETUC endorsed the Commission’s suggestion that distortions of competition due to discrimination of atypical workers were to be condemned. The second round of consultations was launched on 17 April 1996 (EIRR 275:3). That the Commission’s critical and restrictive stance towards atypical work from the 1980s was softened during the early 1990s has already been indicated above. In the second half of the 1990s, however, the Commission even argued that against the background of recent developments in the labour markets, the promotion of ‘flexible’ forms of work was a central task with a view to creating new jobs and sharing existing ones. The changed attitude was expressed even at the language level with the change from ‘atypical work’ to the much more positive notion of ‘flexible work’. It may have been

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relevant that the Commission, the member states, and the EC-level social partners had reached a so-called agreement in favour of part-time work in the frame of the Standing Committee on Employment, on 22 September 1994. In this non-binding solemn text, the Commission (and the ETUC!) had agreed that part-time work offered substantial opportunities for job creation (see Europe, 28 September 1994:2). The governments were called to create an environment conducive to part-time work.158 In its document for the second round of consultations with the social partners in 1996, the Commission referred to the necessity to review legal, administrative, financial etc. barriers against atypical work. It suggested that aspects such as the conditions and means of the promotion of flexible forms of work should be central points in presumptive social partner negotiations (point 10.4 of the second consultation document). Nevertheless, flexible forms of work should only be introduced after consultation with the workers (ibid, point 11.2). Referring to the answers submitted in the first round, the Commission suggested that equal treatment of atypical workers should be chosen as the fundamental principle (point 11.1). Important features of the contents of a Community initiative as outlined by the Commission were furthermore that all groups of workers should be included, due to the matter being ‘horizontal’ in character (point 10.3); that it should apply to all workers who have an employment relationship according to national law or practice (point 11.1.2); that the principle of non-discrimination should apply to all necessary forms of work and working conditions such as labour law, social security and social assistance, social services and professional training, etc. if they are not excluded for reasons of a specific character of the form of work (point 11.1.3). After setting out these details on an envisaged Community instrument, the Commission asked management and labour, first, to transmit an opinion or, possibly, a recommendation with a view to the goals and the contents of the proposed measure, and second, to decide if they wanted to take up negotiations on the issue. On the part of the three major social partner organisations, UNICE, CEEP and ETUC, the response to this second consultation document was a joint letter to the Commission asking for the suspension of the legislative process according to Article 3.4 of the Social Agreement, dated 19 June 1996 (EIRR 275:3). Still in June, a meeting between the representatives of the secretari-ats took place with a view to setting the scope of the talks (EIRR 271:3). On 21 October 1996, UNICE, CEEP and ETUC formally launched negotiations on an agreement concerning ‘flexibility of working time and security for workers’. The participants’ preferences in terms of outcome were as shown in Table 4.6 (see e.g. second consultation document of the Commission). These quite antagonistic starting positions meant that the three federations were still

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Table 4.6 The preferences in the atypical work negotiations

‘stumbling over the content of the negotiation’ (Europe, 28 January 1997: no. 35) even at the fourth session of bargaining, on 21–22 January 1997. The ETUC needed to take most difficult tactical decisions. From the very first minute, the ETUC knew that these would be critical negotiations. However, the alternative, i.e. a Council Directive, did not seem unproblematic, either. The danger was to get extremely minimalist results, as indicated e.g. by the earlier Belgian and German compromise proposals. The ‘ideal solution’ thus seemed a framework Directive to cover all transversal aspects of atypical work (including social security), to be supported by a social partner recommendation. With a view to social security, in particular, the ETUC found extremely difficult framework conditions. It considered the matter to be essential to the non-discrimination of atypical workers. But the employers had already caused ‘major difficulties’ when during the negotiations on parental leave, the ETUC wanted at least a reference to the continuity of social protection during the period of leave (which was in any case considered a competence of the member states by both parties; interview with ETUC official). But not only the employers were openly hostile to including social security: the ETUC believed that the governments might refuse to implement a collective agreement which subjected them to financial obligations, ‘especially during a period of Treaty revision’ (interview with ETUC official). In the parental leave case, already, reference to social security had received harsh criticism from the part of some governments. Therefore, the ETUC considered from the outset that it would, at best, be possible to have a non-binding recommendation on

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social security included in a collective agreement, while the negotiations could only include questions of labour law and working conditions. UNICE/CEEP, in turn, were reluctant to include any reference to social security in the agreement at all. It seems most relevant that even under the Social Agreement, social security provisions can only be adopted unanimously in the Council of Ministers: on that issue, management can still rely on a single government to block the EC Council. At the first meeting (21 October 1996), both sides presented their basic positions. The employers wanted to restrict the scope of the negotiations to ‘permanent part-time’ only and wanted to apply thresholds such as e.g. size of the enterprise to the guarantee of the principle of non-discrimination. UNICE/CEEP argued that their negotiating mandate from their member organisations was (at least for the moment) restricted to part-time work. The ETUC wanted to cover all forms of atypical work, i.e. part-time, temporary, casual, and agency work, homework and telework (although not necessarily all in the framework of these negotiations). Labour recognised that it would not be possible to deal with statutory social security in the Agreement but stressed the necessity ‘to take steps to ensure that governments deal with this fundamental issue’ (interview with ETUC official). During the second meeting, each delegation reacted to the other’s demands. For example, UNICE/CEEP argued that a recommendation or a joint opinion by the social partners to the governments would only irritate the latter and/or lead to rising costs. The ETUC continued to consider the issue as essential. Labour criticised the unclear notion of ‘permanent parttime work’ as unacceptable. At the third meeting, once again, the employers stressed their restricted bargaining mandate with regard to the scope of the agreement. The ETUC reiterated that universal coverage of at least parttime workers was essential: ‘there would otherwise be no sense in reaching an agreement for a minority of workers, since more and more employers engage workers under fixed-term contracts and working relationships of various kind and 42 per cent of part-time workers are employed for a fixed period’ (interview with ETUC official). This session was adjourned in order to enable the groups to meet separately, but a resumption of the full meeting proved impossible. Both at the third and the fourth meetings (20–21 January 1997) the ETUC delegation considered it essential that the employers should broaden their negotiating mandate, as otherwise the negotiations would reach an impasse. Most of the fourth meeting took place in groups. There was just one short plenary on the second day. The employers seem to have indicated that they might include part-timers on a fixed-term contract, but still wanted to exclude casual/occasional workers. At that point, the negotiations were in imminent danger of breaking down. On 24 January 1997, the Secretary-General of the

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ETUC, Emilio Gabaglio, pressed for a clear answer as to the two unconditional aspects for the unions (i.e. a reference to social security and the inclusion of all part-timers) in a letter to his counterparts on the employer side. He reminded them of the issues at stake with a view to part-time work as well as the consolidation of the contractual role of the social partners. By early February, the labour negotiators noticed some movement at the management side.159 A core group (groupe restreint) of negotiators met to draft a text which assembled various compromise formulae from both sides. During the fifth meeting on ‘flexibility of working time and security for workers’ (24 February 1997), the employer and employee groups mostly discussed this draft separately. The employers agreed to say something on social security, and to include in the agreement part-time work, in general. On the other hand, they stressed the importance of thresholds to nevertheless limit the application. At the sixth meeting (4–5 March 1997), the ETUC reiterated that it rejected any acknowledgement of thresholds at the European level but was, in recognition of the situation in member states (often in collective agreements), ready to accept some flexibility for member states and social partners. The ETUC, in turn, asked to focus more on improvements in the quality of part-time work, going beyond equal treatment. Differences between the two sides continued regarding the balance to be struck between the protection vis-à-vis the promotion of part-time work. By then, the draft agreement was already quite elaborated. Disagreement concerned specific formulations. For example, the ETUC wanted to stress that part-time work should be on a voluntary basis when talking about the purpose of the agreement (accepted by management at the seventh plenary). Management was opposed to limiting the possibilities of exclusion from the equal treatment principle of casual workers, while labour wanted to grant this only ‘for justified reasons’ (which was never accepted by management, see clause 2.2). With a view to defining equal treatment rights in cases where no comparable full-time worker is available, the ETUC wanted to refer to workers in the same undertaking while UNICE/CEEP (successfully) opted for the same establishment.160 Furthermore, the ETUC did not want parttime workers to be treated in a ‘less favourable’ manner (thus allowing scope for positive discrimination) while UNICE/CEEP (without success in the end) opted for the formulation that part-timers should not be treated in a manner ‘different’ from comparable full-timers. The scheduled seventh plenary meeting was postponed to 21–22 April (instead of 9–10 April) because the small drafting group needed more time to prepare the next plenary. In any case, that the atypical work negotiations were ‘far more complicated technically than the first negotiation between the social partners’ (Europe, 28 January 1997: no. 35) made an extension of the nine month deadline (with agreement by the Commission) essential.

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The final ‘draft European framework agreement on part-time work’ was drawn up by the drafting group after a meeting of the ETUC Industrial Relations Committee and of the UNICE Social Affairs Commission on 5 May 1997. This project was accepted during the final (i.e. eighth) plenary negotiation on 14 May 1997. It was submitted to the three decision-making bodies for signature and subsequently submitted to the Commission for a proposal to the Council to implement (Europe, 15 May 1997: no. 29). The Agreement was formally signed on 6 June 1997 (i.e. almost one year after the Euro-groups had announced the start of negotiations, and almost fourteen months after the Commission had started the second round of consultations). On 23 July 1997, the Commission proposed a relevant Council Directive to the Council. 4.3.3 The results The part-time deal represents once again a framework agreement (see Table 4.7). It sets out basic principles and a number of requirements relating to part-time work, to be further developed within the process of national implementation.161 In the latter, both the governments and the social partners are envisaged participating: ‘the Social Partners are best placed to find solutions that correspond to the needs of both employers and workers and shall therefore be conferred a special role in the implementation and application of this agreement’ (eighth introductory consideration). The scope of the agreement includes part-time workers only.162 This was the employers’ preferred option. It is a concession to labour that in the preamble, the signatory parties voice their ‘intention…to consider the need for similar agreements relating to other forms of flexible work’ (first paragraph).163 Table 4.7 The Part-Time Agreement (overview)

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However, no thresholds to further restrict the number of part-timers covered by the agreement were formulated at the European level (as a concession to labour). Nevertheless, there are two possibilities for exemptions from the agreement. First, member states and/or national social partners may, for ‘objective reasons’, ‘exclude wholly or partly from the terms of this agreement part-time workers who work on a casual basis’ (clause 2.2).164 Second, when ‘justified by objective reasons’ and ‘where appropriate’,165 member states and/ or social partners may make access to particular conditions of employment subject to a period of service, time worked or earnings qualification’ (clause 4.4). According to the interpretation of management, the social partners could agree on such exemptions even in those cases where a member state does not (interview with CEEP official). Both variants of exclusion from the scope of the principle of non-discrimination ‘should’, according to the agreement, be reviewed periodically, ‘to establish if the objective reasons for making them remain valid’ (casual work) especially ‘having regard to the principle of nondiscrimination’ (specific qualifications to the access to particular conditions of employment). The minimum prescriptions of the agreement concern employment conditions only. There is no definition of this term in the agreement. But in any case, the signatories considered that ‘matters concerning statutory social security are for decision by the Member States’ (preamble third paragraph). The social partners nevertheless remind the Council of the Dublin Employment declaration of December 1996, where the need to make social security systems more employment friendly by ‘developing social protection systems capable of adapting to new patterns of work and of providing appropriate protection to people engaged in such work’, was inter alia emphasised (quoted in the second paragraph of the preamble): ‘The parties to this agreement consider that effect should be given to this declaration.’ (ibid.) With a view to one of the aims of the Commission, i.e. to prevent distortions of competition due to cleavages in de facto labour costs for atypical workers, this result is disappointing. Dangers of distortion of competition as detected by the Commission had indeed mainly been due to unequal statutory social security rules. Even in the summary to its comparative study on the working conditions in the member states in 1989, the Commission had found that the basic working conditions (e.g. sickness, holiday, and redundancy payments, legal minimum pay) would in most member states apply to full-time as well as to part-time workers (SEC[89] 926 final: no. 15). The significant differences in cost for part-timers e.g. between the Netherlands and Germany result exactly from the exclusion of many part-timers from both pension and unemployment insurance in Germany while in the Netherlands, pro-ratatemporis treatment starts from the first hour of work (see Commission and ETUC information).166 Even for non-statutory social security, it is unclear

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whether the Part-Time Agreement actually prescribes equal treatment. According to Commission sources it might be a problem that under ECJ jurisprudence, occupational social security belongs to the realm of pay which is explicitly excluded from the scope of the post-Maastricht social policy regime (Article 2.6).167 It seems reasonable but is not positively stated so far that pay, in turn, falls under ‘working conditions’. It seems that UNICE/CEEP preferred not to explicitly define working conditions (as desired by the ETUC) but rather have the courts decide at a later point in time.168 The ‘principle of non-discrimination’ as set out in the agreement (clause 4) is the only compelling provision (all others are ‘should’ clauses)—but it is not unconditional. It provides that part-time workers shall not be treated in a less favourable manner than comparable full-time workers solely because they work part-time ‘unless different treatment is justified on objective grounds’ (clause 4.1). ‘Where appropriate’, the principle of pro-rata-temporis shall apply (clause 4.2). That neither the objective grounds which might legitimate unequal treatment nor the criteria to establish appropriateness of the application of the pro-rata-temporis principle are being specified leaves significant leeway. In any case, there is ample scope for judicial activism on the part of the ECJ which might in the end have to interpret the standards set by management and labour. According to ‘the willingness of the Social Partners to establish a general framework for the elimination of discrimination against part-time workers and to assist the development of opportunities for part-time working on a basis acceptable to employers and workers’ (preamble second paragraph), clause 5 of the agreement concerns ‘opportunities for part-time work’: member states as well as social partners should review obstacles of a legal or administrative nature which may limit the opportunities for part-time work; a worker’s refusal to transfer from full-time to part-time work or vice versa should not in itself constitute a valid reason for termination of employment; employers should give considerations to requests for transfers from or to part-time work, and should facilitate access to part-time work ‘including skilled and managerial positions’; ‘where appropriate’, they should also facilitate access by part-time workers to vocational training. With a view to evaluating the contents of the Part-Time Agreement, Table 4.8 provides an overview against the background of the Commission’s 1990 proposal. If compared to the Community measure envisaged by the Commission both in its 1990 proposals and still in its second consultation document, the result is at best partial. According to the Commission, the principle of non-discrimination should apply to all atypical forms of work, and to all working conditions such as labour law, social security and social assistance, social services and professional training, etc. if not excluded for reasons of a specific character of the form of work. It seems, however, that

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although the collective agreement cannot meet the standards of the relevant Commission proposal, it is not far from a presumptive lowest common denominator in the Council. It will be a crucial test for the future of EC social policy whether the Commission will follow up on those aspects which are not (or not yet) covered by the collective agreement. Only under pressure from the Commission will the employers be ready to negotiate on work forms other than part-time, and only under significant pressure might the member states be ready to extend non-discrimination of atypical workers in their social security systems. In any case, the Part-Time Agreement was welcomed ‘as a positive and Table 4.8 A comparison of the Part-Time Agreement and the Commission’s 1990 proposals

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timely signal regarding the development of Social Europe, and a reminder of the key role that the social partners have to play in this’ according to Social Affairs Commissioner Flynn (quoted in Europe, 16 May 1997: no. 21). Not only the Commission but also the European Council reacted most positively to the deal struck by management and labour: ‘The European Council strongly welcomes the agreement concluded by the Social Partners on part-time working’ (Presidency conclusions, Amsterdam European Council, June 1997, SN 150/97:11).169 Against this background, some within the ETUC are afraid that the Part-Time Agreement might be used by management to promote atypical work and that it might thus actually reinforce the existing trend towards such work and distract from the unions’ goal of a general reduction in working time (towards 35 hours a week). Substantial progress from the Agreement for part-timers is indeed only expected for the UK (and possibly Ireland). Some hope that via the ECJ interpreting the agreement, there might be positive developments in the longer run. The major benefit from the Part-Time Agreement from the ETUC’s viewpoint is, however, at the procedural rather than the substantive level. The agreement is thought to represent a qualitative leap with a view to the consolidation of contractual relations at the European level. At the time of the integration of the Social Agreement into the Treaty, it was thought to be crucial to prove that the quasi-corporatist procedures work. Furthermore, the agreement is seen to open a chance for other Euro-level negotiations on different forms of atypical work, while a failure of the negotiations was perceived to close this door on a long-term basis. It is also appreciated by the unions that, for the first time, the employers explicitly pointed to the possibility of Euro-level sectoral 170 negotiations between management and labour with a view to adapting its provisions. Last, but not least, a multi-faceted role for the national social partners is foreseen in the Agreement, e.g. in the specification of details during the implementation of the Agreement and in the periodical review of certain aspects. This applies also to those countries without participation of private interests in policymaking and is seen as a possibility for national unions to exert influence.171 In short, it seems that the low substantive standards agreed on were accepted by labour in exchange for greater involvement of the ‘social partners’ at all layers of the European multi-level system. This may be considered a trading of women’s interests172 (as the overwhelming majority of part-timers) against organisational self-interest of the ETUC and its member organisations. The ETUC’s Women’s Committee’s rejection of the deal did, however, not affect the result of the vote in the ETUC’s executive committee because a majority of votes pro was sufficient.173 Quite to the contrary, UNICE/CEEP welcome the high degree of devolution and the Agreement’s clause on opportunities for part-time work

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which provides for a review of obstacles to such atypical work (interview with UNICE official, July 1997). They hope that practices such as in Italy (where part-time work is restricted to a specific percentage of all work) and in Denmark (where collective agreements restrict part-time work) shall be stopped (interview with Jytte Fredensborg, Secretary-General of CEEP, July 1997). Detailed analysis reveals that in fact, the Part-Time Agreement is characterised by process law rather than by specific standards or unconditional rights. It seems that both sides of industry welcome that, as a consequence of their deal, the so-called social partners will be involved in relevant policymaking processes on all layers of the multi-level system. It is a new feature as opposed to the parental leave case, that a review process will take place not only at the European level but also at the lower levels where barriers to part-time work as well as the presence of objective reasons for exemptions have to be reviewed periodically. Once again, it seems that Euro-level activity and devolution are often two sides of the same coin. This implies, for example, that the relative strength of labour and industry will be of crucial importance for the final substantive results from the Euro-level agreement at specific venues. That the vague standards of the Part-Time Agreement leave much flexibility for implementation at the national level seems to have made it easier for UNICE/CEEP’s member organisations to agree. It seems inevitable that, in the end, questions of interpretation will come to the ECJ (notably the notion of ‘working conditions’ subject to non-discrimination). That such grey zones were nevertheless written into the agreement in the first place (instead of defining which working conditions are actually meant, as the ETUC had asked for) might be not only the preferred option of management to limit the effects as much as possible174 but also a matter of internal UNICE tactics: the less explicit the commitments for its members were in the agreement, the better its chances of being accepted and of being a positive precedent for further deals. 4.3.4 The lessons from the Part-Time Agreement The 1996–97 part-time negotiations between the Euro-level representations of management and labour have shown that it is no longer true that its organisational weakness is a pure advantage for industry. Because labour would not give in to the preferred narrow scope of a presumptive agreement on only ‘permanent part-time work’, the strength indeed turned into a weakness that endangered a basis of compromise. Under the specific circumstances, however, a collective agreement ultimately seemed desirable to UNICE (or at least less undesirable as Council legislation). It was a crucial sign to

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all other political actors and to the public that the desired negotiation mandate was given to the Euro-level by the member organisations, as soon as seriously demanded by the Brussels office. While UNICE had pledged that it could not go beyond its negotiation mandate for permanent part-time work only from the first until the third meeting, they signalled flexibility at the fourth rendezvous of the negotiators and were empowered to negotiate an agreement on parttime work in general by the fifth meeting. In addition to this pathbreaking development, the part-time deal offers another chance to learn about the distinctive style of agreements developing under the post-Maastricht social policy rules (on the process of Euro-bargaining in general see section 5.2). The two framework agreements by the European social partners, on parental leave and on part-time work, follow an identical pattern. A preamble is followed by ‘general considerations’ (this is a well-known tradition in all EC legislation). The heading II is entitled ‘content’ and includes a number of ‘clauses’ which outline purpose, scope, and definitions of the agreement, as well as provisions on implementation (called ‘final provisions’ in the Parental Leave Agreement). We thus witness the development of a specific culture of Euro-collective agreement. A number of provisions are identical (or almost identical) in both agreements. They allow the maintenance or introduction of more favourable provisions than set out in the agreements; they explain that the dispute settlement arising from the application shall be dealt with in accordance with national law, collective agreements and practice; and they announce that the agreements shall be reviewed after five years if requested by one of the signatory parties. It was uncontroversial from the outset that the ETUC, UNICE and CEEP once again requested the Commission to submit their collective agreement to the Council for making the requirements binding in the member states (preamble fourth paragraph). The Part-Time Agreement was swiftly turned into a draft Directive and adopted by the Council (on 15 December 1997), exactly like the parental leave text. There is no doubt that this will also in the near future be the preferred (and de facto the only practicable) way to implement such agreements. Like the parental leave deal, the Part-Time Agreement represents a framework agreement only. Most details need specification at the lower levels of the European multi-layer system. They will be tackled by the governments (after consultation with the social partners) or by the national/sub-national social partners. ‘C’est cette dynamique entre le niveau européen et national qui constitue un des développements les plus interessants.’ (Jo Walgrave in Notabene, 1997/100:12) The intention is to come to some convergence of the national systems while nevertheless upholding their particularity. In terms of procedure, too, it seems that a culture of collective negotiations has developed at the Euro-level. As in the parental leave case,

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Jo Walgrave of the Belgian Conseil National du Travail served as a president and mediator for the negotiations. She is certainly right to characterise the post-Maastricht developments in EC social policy as a progressive learning process at the European level.175 The Commission proceeded along the same lines as in the parental leave case: a draft Directive was suggested without delay, and the Euro-groups which had not participated in the negotiations were invited to an information meeting on the Agreement, sponsored by DG V (see Europe, 4 July 1997: no. 31). Notwithstanding important structural similarities of the two existing Euro-level collective agreements under the Social Agreement as well as similar procedural patterns in the relevant negotiations, there are also some changes to be noted on the way from the first to the second agreement. Concerning contents, the Parental Leave Agreement allowed for different provisions only ‘as long as the minimum requirements provided for in the present agreement are complied with’ (clause 4.2). The part-time deal departs from this approach into a somewhat unclear direction: again, the implementation of the agreement ‘shall not constitute valid grounds for reducing the general level of protection afforded to workers in the field of this agreement’. But ‘This does not prejudice the right of Member States and/or Social Partners to develop different legislative, regulatory or contractual provisions, in the light of changing circumstances, and does not prejudice the application of clause 5.1 as long as the principle of non-dis-crimination as expressed in clause 4.1 is complied with’ (clause 6.2, emphasis added). Because the principle of non-discrimination is subject to conditions which are not specified in the agreement itself (see above), devolution has an even more farreaching quality in the second collective agreement. It is a noteworthy change that in the Part-Time Agreement, the time limit for national implementation is no longer part of the final provisions (which was much criticised in the Council as an overstretching of competences),176 but is rather inserted in the preamble as a request to the Commission. Finally, the provision that ‘without prejudice to the role of national courts and the Court of Justice, any matter relating to the interpretation of this agreement at European level should, in the first instance, be referred by the Commission to the signatory parties who shall give an opinion’ (clause 4.6 Parental Leave Agreement), was moved to the preamble and changed into a ‘request’ by the social partners in the part-time case. Concerning procedures, it was a relevant change that on the management side, new interest groups were invited to the negotiating table. Although only as ‘experts’ without voting rights, groups representing the hotel, cleaning, and retail sectors participated in the plenaries. This was a reaction to the controversies on representativeness of the signatories of the parental leave deal, following the law suit of UEAPME (see section 5.3).

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4.4 The practice of the Social Agreement: an overview As outlined in section 2.1, the Maastricht Treaty had been preceded by years of intense debate on EC social policy, especially on the need (perceived by a large majority of the EC governments) to enlarge EC competence and to employ QMV By the time of the 1990–91 IGC, the central policy projects of the 1989 social action programme were blocked in the Council. Therefore, it seemed plausible that the substantive and procedural innovation enshrined in the Maastricht Social Agreement would readily be brought to fruition. It is well known that the problems during the ratification process unexpectedly postponed the entry into force of the Treaty on European Union. In fact, however, this was not the only reason for delay in the exploitation of QMV. The governments were reluctant to have recourse to the Social Protocol even after it became a viable route towards social policy among the eleven member states (except the UK) by 1 November 1993. The initial reluctance to employ the Social Agreement as a legal basis comes as no surprise, however, if one considers that due to the UK optout, a two-class Europe had been created: any Acts adopted under the Social Agreement and any financial consequences other than administrative costs entailed for the institutions were not applicable to the UK. This had made John Major rejoice: ‘Europe can have the social chapter. We shall have employment… Let Jacques Delors accuse us of creating a paradise for foreign investors: I am happy to plead guilty’ (quoted in Europe, 3 March 1993:13ff.). The other member state governments turned out to be hesitant to proceed at a comparatively faster social policy pace, under these conditions. The fact that Great Britain was exempted from the Social Agreement’s policies had created a situation where one member in a common market was not bound to a specific set of rules governing the game. The increasing economic interdependence, in general and within the EC Internal Market in particular, has made social and labour standards ever more susceptible to arguments of competitiveness. It was exactly against this background that a ‘social dimension of the Internal Market’, the so-called EC Social Charter, and eventually the Social Agreement had been fought for. However, any social Directive may to some extent create (additional) distortions of competition, if labour costs (in the wider sense) are increased outside the UK only. Even though economists argue that labour costs are multi-faceted and productivity is more important in general, politicians tend to be susceptible to arguments by industry to lower employers’ burdens (Falkner 1993b), which is further eased by the current general trend of flexibility and de-regulation in labour law (for a comparative study see e.g. Tálos and

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Falkner 1994). Therefore, the eleven signatories of the Social Agreement initially did not want to employ their new Treaty base, but rather preferred to keep the UK in the game. In fact, only reluctant and incremental use was made of the Social Agreement. Soon after the Maastricht Treaty had come into force, the Greek Council Presidency opened its term in January 1994 with considerable verbal devotion to the social dimension. The President of the Social Affairs Council, Mr Giannopoulos, told MEPs that he intended to unblock several issues by majority voting if necessary—especially the Directives on parental leave and on reversal of the burden of proof: ‘It is difficult to move away from the system of unanimity, but…I will bring these things forward and get a decision even if that means just eleven’ (Europe, 15 January 1994:8). Despite all this, no new use of the Social Agreement (the Commission had immediately transferred the European Works Councils project under the new legal basis) had been made by the end of June 1994 because the overwhelming majority of delegations preferred to continue the tiring negotiations among all member states (see EuroAS, 5/1994:4; Europe, 18 April 1994:11). The Commission, too, considered action among all member states to be preferable in principle. Despite the Commission’s announced ‘intention to use both…[the Social Agreement]…and the other Treaty provisions to ensure a dynamic social dimension of the Union’ (White Paper on Social Policy, point 23), the uniformity of EC law—and thus, the level playing field for economic actors—was a major concern. In its Communication on the implementation of the Social Agreement, the Commission accordingly highlighted as its central goal the development of a social policy that finds the approval of, if possible, all member states (COM[93] 600: pt 8). In addition, the Commission soon had self-interest making it hesitate to use the Social Agreement as a legal basis for its social policy ambitions. Indeed, it had tried to push things when it put the draft European Works Councils Directive under the Social Agreement only a few days after the Treaty on European Union came into force. This seemed a good subject to test the new procedures because the problem of competitive disadvantage was less salient due to the comparatively low costs involved. As outlined in the case study above, however, the ‘talks on talks’ between labour and industry broke down at the last minute. One of the problems had certainly been that the social partner organisations had not yet built up negotiation structures and procedures. In parallel, tricky logistic questions (how to issue negotiation mandates; how to form negotiating teams, etc.) and substantive issues had to be tackled. In addition to unfavourable framework conditions in principle (see case study, above) the time limit

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set by the Commission proved too restrictive. In short, the first test case of the post-Maastricht social policy procedures seemed a failure (at least if viewed from a distance). According to Commission sources, a very difficult period followed this ‘breakdown due to lack of experience’ of the social policy network (interview with social dialogue expert from the Commission). There was then a great deal of mutual mistrust between both sides of industry so that the Commission considered that a break was needed with a view to the success of other legislative projects and the future of the social dialogue, in general.177 Increasingly, however, the quality of the compromise solutions reached among the twelve, e.g. on young workers, became a matter of public controversy. The bargaining processes following any Commission proposal typically ended in a significant lowering of standards in order to make the UK (plus occasionally other Council members) drop their opposition—an often useless attempt. Soon after the Social Agreement came into force, the EP stated that it preferred ‘a good directive by 11 countries to a bad one by 12’ (van Velzen, Chairman of the Committee on Social Affairs, quoted in Europe, 15 January 1994:8). By the end of the Greek Presidency 1994, the social policy spokesperson of the EPP, Ralf Chanterie, warned that social affairs ministers ‘now have the wrong idea’ about seeking consensus ‘even on subjects where the majority can be attained’. Consensus was always sought by reducing demands, he added. The EP consequently wondered ‘if it is still useful to approve directives on which there is consensus’ (quotes from Europe, 28 May 1994:8)—for they were completely watered down. Only by the end of September 1994 (i.e. eleven months after the Maastricht Treaty had come into force) were both the Council and the Commission ready to use the Social Agreement in at least one other case, i.e. parental leave (Europe, 24 September 1994:6). By December 1994, the eleven-only procedures were employed to adopt a Council Resolution (OJ 94/C 368/3) on a ‘Contribution to economic and social convergence in the Union’ because a statement relating to minimum social standards was unacceptable to the Major government (see EIRR 252:2).178 During the second half of 1995, consultations with the social partners were started on the burden of proof in sex discrimination cases and on atypical work. Sexual harassment followed suit in July 1996, and national consultation of workers in April 1997. In any case, policy projects were submitted in a cautious manner because the Commission wanted to allow enough time for their processing by the social partners. To date, there was only one brief period in summer 1997 when two drafts were in the stage of second consultations at the same time179 (see Table 4.9). By summer 1997, three new legislative projects had been introduced under the post-Maastricht social policy regime in addition to the issues

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which were covered in case studies above (i.e. Works Councils, parental leave, and atypical work). They concern a reversal of the burden of proof in court cases on sexual discrimination; measures against sexual harassment at the workplace; and worker information and consultation in national enterprises. Commission and ETUC experts expect that another set of collective negotiations on EC social policy will soon be started by UNICE/CEEP and the ETUC. 4.5 Synopsis and the future The evidence presented in Chapter 4 reveals that the corporatist policy community under the Maastricht Social Agreement has indeed become operational. The practical functioning of the corporatist EC social policy community thus countervails prominent expectations in the Euro-pluralism versus corporatism debate (see section 1.2.1.3). I have outlined above why the policy networks approach is better equipped to capture the specifics of contemporary co-operative public-private interactions along corporatist lines than the old label of macro-corporatism (see section 1.2). In any case, the policy style which has developed under the Maastricht Social Agreement is opposed to US-style pluralism. The empirical parts of this study indicate that except in a very short-term perspective, Delors’ effort to bring about corporatist co-operation of public and private players in EC social policy was indeed surprisingly successful (for an adverse statement see Schmitter 1996b:16). Three significant EC level collective agreements were signed: the proposals to the 1990–91 IGC; the deals on parental leave; and on part-time work. They are already transformed into binding EC law (the 1991 Agreement even into EC primary law). This suggests that the patterns of EC social policy-making are not necessarily different in kind from those which are known as ‘corporatist’ in some EC member states. At least from a pre-Maastricht viewpoint, this would indeed have seemed almost revolutionary. (That this neither indicates that all problems of the EC social dimension are solved nor that there are good reasons to be too optimistic with a view to forthcoming social partner deals will be discussed in the conclusions, Chapter 6.5.) The Maastricht Social Agreement has to date seen seven Acts being debated (see Table 4.9). In addition to two sets of negotiations concluded, new Euro-collective negotiations seem on the agenda by the time of writing, on fixed-term work. Apart from the non-binding Council Declaration which was in fact decided in an ad hoc manner, four issues saw no formal collective negotiations. There were informal talks concerning European Works Councils with in fact significant intra-group developments (see also Chapter 5 for

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Table 4.9 Policy projects under the Social Agreement (overview)

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details). The European Works Councils case furthermore revealed that ‘social dialogue’ was definitely present as a principled idea with normative validity already at the time of the first social partner talks under the Social Agreement’s new regime: neither party wanted to be blamed for the failure to reach a corporatist deal. In the case of worker consultation in national enterprises, UNICE rejected to negotiate (after considerable internal dispute) with the argument that the topic was not appropriate for regulation at the European level. At the same time, UNICE president Périgot pledged that this should not be taken to indicate that UNICE was no longer willing to negotiate, under the Social Agreement (Europe, 16 March 1998:11). Just a few days before this UNICE decision was finally made public, collective negotiations on fixed-term work with the ETUC and CEEP were announced. On sexual harassment and on the reversal of the burden of proof in sex discrimination cases, management and labour did not negotiate either. As outlined in section 3.1.2, the Social Agreement made no distinction between social policy issues, with a view to prospective collective negotiations. Even in those member states which are known for their corporatist policy-making patterns, however, the social partners are involved to a lesser degree in some issues within the wide field of social policy. For example, the Commission could not find any collective agreement on the issue of burden of proof in sex discrimination complaints. That this issue—such as the draft concerning sexual harassment—falls outside the traditional field of labour law (it concerns procedural rules and litigation in court) is a plausible argument180 for not reading the absence of negotiations as a failure of the corporatist patterns under the Social Agreement, as such (notably in the presence of two agreements concluded so far). In any case, it is crucial to keep in mind that also at the national level the existence of a corporatist policy community does not imply that labour and management are involved in all relevant decisions to the same extent. The practice of the innovative Maastricht rules reveals a focus of the social partners on labour law. Social security matters have so far been treated as belonging to the exclusive realm of the Council. The most distinctive feature of the collective bargaining dimension under the post-Maastricht rules, however, is that the classic topic of national collective bargaining, pay, is excluded from the field of ‘negotiated legislation’ (Dølvik 1997:47). Because UNICE refuses to negotiate without pressure from legislative drafts under the Social Agreement, this will probably not change in the near future. In this light, it is significant also from a tactical viewpoint that to date, the Commission proposed to the Council binding EC legislation on those issues which had not been negotiated by the social partners (i.e. European Works

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Councils and the burden of proof; it is about to propose drafts on sexual harassment and on national-level worker consultation). The quality of recent EC social standards has aroused controversy. A relevant background is the general debate on the tension between community and autonomy within the Union. Prompted by the tiring stalemates and the poor implementation records which the former policy of detailed harmonisation legislation had encountered, the Commission has since the mid-1980s ‘developed new regulatory methods, which uphold the goal of European co-ordination, but nevertheless seek to reduce the difficulties of consensus-building and minimize the practical importance of differences in the implementation conditions existing in various national administrative systems’ (Scharpf 1994:233). Such innovative regulatory strategies have so far been detected e.g. in the areas of telecommunications, work-safety rules, product-related mutual recognition and technical standardisation. The Directives on European Works Councils and parental leave, as well as on part-time work, suggest that a new policy style which provides for both ‘community and autonomy’ (see Scharpf 1994) is also applied in EC social policy. The crucial elements of this approach are minimum harmonisation (the member states may uphold or set up more stringent standards); framework legislation (only some basic principles are set up at the EC level while most details are decided at the lower tiers of the European multi-level system); and double subsidiarity (both the national level and the social partners precede traditional EC legislation by the Council; see section 3.1). This is an attempt to navigate through the stormy waters between the ‘Scylla and Charybdis’ of EC social policy: non-intervention in the face of pressures to competitive devaluation in the member states, on the one hand, and over-regulation (respectively stalemate due to too costly projects), on the other. From an optimistic viewpoint, the innovative policy style described above might therefore offer a pragmatic solution to what has been called the ‘regulatory conundrum’ (M.Rhodes 1995a:80) of European social policy, i.e. the difficulty of regulating despite the striking diversities within the Union concerning historical, legal, institutional and ideological traditions. By combining legislative and collective bargaining methods at multiple levels, distinctive regimes can more easily be combined, and disputed details may be left for the lower political levels and partly for other actors (the social partners) to decide (for an, in principle, favourable statement on such patterns see M.Rhodes 1992:34ff.). As this happens in parallel in all member states and later even in regions and enterprises, however, what facilitates compromise is at the expense of uniformity in standards, i.e. a level playing field for economic actors throughout the liberalised market. Thus, the solution to the conundrum might well belong to the realm of theory only. This is why the ‘new style’

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was indeed refuted as ‘neo-voluntarism’ (Streeck 1995a, 1997). Streeck’s concept of neo-voluntarism ‘stands for a type of social policy that tries to do with a minimum of compulsory modification of both market outcomes and national policy choices, presenting itself as an alternative to hard regulation as well as to no regulation at all’ (Streeck 1994b:30). It ‘allows countries to exit from common standards where their polity or economy will not sustain them’, ‘gives precedence to national practices and contractual agreements between market participants…; offers actors, public and private, menus of alternatives from which to choose’ (Streeck 1995a:45ff.). Streeck (1994a: 171) has vividly reminded the scientific community that they tend to forget the obligation of the ‘higher level’ of governance under the classical concept of subsidiarity to ensure that the outcomes of self-regulation are compatible with general political objectives and norms of social justice, instead of being merely market outcomes or results of a contingent distribution of power. Indeed, the crucial question in the evaluation of EC social standards is about yardsticks. It seems crucial, first, not to measure minimum standards only against the most advanced social laws (see also Ross 1995b:385). The European Works Councils Directive does not set up worker codetermination in the narrow sense, such as practised e.g. in Germany (for an extremely pessimist view on the new approach exemplified in the European Works Councils Directive see Streeck 1997). A more benevolent light is shed on this Directive if it is not only viewed as setting standards and rights (which are undeniably low) but also as process law promoting the transnational communication between workers—with yet unknown longterm potentials (see e.g. Keller 1996:481; Lecher and Platzer 1996:511ff.; Jacobi 1995:277).181 Second, EC social regulation and EC labour relations do not appear in a ‘tabula rasa’ situation (see Majone 1993b:159ff.). A look beyond the social policy discourse is useful here: within the literature on the so-called ‘democratic deficit’ of the EU, it has become the mainstream feeling that an exact copy of the democratic systems existing at the national level is neither to be expected nor needed (e.g. Jachtenfuchs 1997:8; Grande 1996b; Zürn 1996, all with further references). Nevertheless, the basic principles which are being used as yardsticks for democratic governance apply to the EC, as well. The fact that much policy is nowadays made at the supranational level cannot in itself justify deficiencies in that respect (e.g. Falkner 1994b). The same applies, in fact, to European social policy. Because the EC is a ‘latecomer’ which co-exists with historically grown and

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differentiated social and labour law systems, it would be questionable to expect it to simply replace or copy them. Social state-building will in this case definitely follow different lines than it did at the national level, at the time of Bismarck and Beveridge. It might, in such a very narrow sense, indeed never occur. It would nevertheless be a mistake to disregard the significant policy innovation which characterises EC social policy in the 1990s. There is not only a non-trivial amount of co-ordination of national policies (e.g. with a view to social security of migrant workers; equal treatment rights for female workers) and of common minimum standards (working time; parental leave, etc.). At least measured against the Commission’s social policy ambitions as expressed in the 1989 social action programme, the EC’s social dimension looks successful, by the late 1990s (for various caveats see the conclusions). Furthermore, there is now an established procedural backbone of EC social policy, based on classical political decision-taking by the Council, the Commission and the EP, on the one hand, and on the conventional route to EC social policy, on the other.182 However, all this is of little relevance if ‘symbolic politics’ only are being made. As at the national level, EU social policy will, at the end of the day, have to be judged by its substantive results. On the actual effect of the various measures, including those which served as case studies for EC social lawmaking here (notably European Works Councils, parental leave, and atypical work), further research is needed when the implementation process is completed.183 In any case, the findings of this book indicate that in addition to market-making, there is an increasing degree of social state building in the sense of market-correcting legislation going on at the EC level. This was partly only possible because (in addition to blockades, side-payments or package deals; see Scharpf 1996:19) a joint reshaping of interests and goals has occurred over time. The substantive results may be limited. That intervention was agreed, however, comes into more sharp relief if compared not only—as it usually is—to national social policy, but also to the absent ‘social dimension’ of the global markets and of other regional integration projects. The glass of EC social policy may be half empty under the first lens, but appears half full under the second. By 1997, the new Labour government has given up the UK opt-out, and the Amsterdam Treaty thus provides for the incorporation of the Maastricht Social Agreement’s social policy rules into the ECT. Soon, there will be once again a singular legal basis instead of ‘twin-track Social Europe’ (Shaw 1994). This means, inter alia, that the corporatist patterns of public—private interaction under the Agreement will be applicable to all Community action in the social policy field. The Commission no longer has the option of using a non-corporatist track, not even in areas which are hardly ever a matter of collective agreements even at the national level (e.g. worker health

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and safety). Before submitting any social policy proposal to the Council, the Commission must consult management and labour who may, if they so wish, conclude agreements on the matter. This makes the evidence of progressive adaptation to the innovative regime by the major private interests in EC social policy (to be presented in the following chapter) even more relevant.

5

The evolution of social interest intermediation

As the beliefs and aspirations of groups undergo change due to the necessity of working in a transnational institutional framework, mergers in values and doctrine are expected to come about, uniting groups across former frontiers. (Haas 1958:14)

The previous chapter which took a case-study approach to post-Maastricht social policy-making will now be supplemented by a more longitudinal view on the Euro-level set-up of cross-sectoral interest groups and on their role in EC social policy-making. This chapter provides, first, an outline of each major interest group in the area of EC social policy. I will also summarise the changing strategies of the central interest groups with a view to the social dimension of European integration and to their role within it. Second, the development of a negotiation pattern will be studied. Third, the controversial issue of representativeness in the negotiations between management and labour is on the agenda. Fourth, the crucial role of the public authorities in the overall process of developing ‘social dialogue’ (in the wider sense) will be discussed. Last, but not least, the incentive structure with a view to creating and participating in a corporatist social policy community will be analysed for the EC institutions as well as for management and labour. 5.1 The major interest groups and their strategies vis-à-vis the EC social dimension The many doubts with a view to the practicability of the corporatist decisionpatterns in post-Maastricht EC social policy (see e.g. Roethig 1995:272; Gorges 1996:193) were not unfounded. On the one hand, the single associations’ internal capacity to strike bargains was not obvious. On the other hand, their will to do so was at least partly doubtful if judged against past experiences. If ‘it seems unlikely that anything like a corporatist system could be made to operate, at least until and unless the Euro-groups become 156

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much more effective organisations’ (Mazey and Richardson 1994:29), however, the Social Agreement surely gave strong incentives for reform. Although according to Olson’s logic of collective action, labour’s class interest crucially needs effective organisation, the European Trade Union Confederation needed at least twenty years to mature into an organisation with some political grip (for a detailed analysis with a great deal of insider information see Dølvik 1997). It has already been outlined in section 2.2.1 that the EC institutions actually acted as midwifes in the foundation of the ETUC. By the early 1990s, the ETUC had achieved ‘a remarkable degree of “associational monopoly” in terms of membership, organizing 86 per cent of the, roughly, 52 million unionized workers in Western Europe’ (Visser and Ebbinghaus 1992:215; i.e. 44.7 million). Nevertheless, several member organisations were reluctant to transfer competences to the Euro-level (see e.g. Greenwood 1995c:292; Gorges 1996:103). Before its May 1991 Congress, the ETUC called for EC legislation rather than committed collective negotiations at the European level (see Cassina 1992:13; interviews with ETUC official, July 1997). In any case, the ETUC was the first major Euro-group to reform its internal structure with a view to enhancing negotiating capacity at the European level (on details see e.g. Gorges 1996:101ff.). In 1991, voting by two-thirds majority was reformed with a view to de-blocking the decision process and to allocating the voting rights according to size of membership (see Greenwood 1997:167). Furthermore, the European Industry Committees (i.e. European industry federations)184 were attributed full voting power except in financial and statutory matters (see Ebbinghaus and Visser 1994:239).185 At the same time, the financial means and staff were increased. Further amendments to the ETUC constitution were decided during its May 1995 Congress. ETUC now ‘aspires to be a unified and pluralistic organisation representing all working people at European level’ (see ETUC Constitution, preamble). The ETUC shall direct its activities towards the EU, the Council of Europe, EFTA, and ‘the European employers’ organisations, with a view to establishing solid labour relations at European level via the social dialogue and negotiations’ (ibid.). The Executive Committee was given additional tasks: to ‘determine the composition and mandate of the delegation for negotiations with European employers’ organisations’, and to ‘ensure the convergence at European level of the demands and contractual policies of affiliated organisations’ (Article 11). The basic reasoning of the eighth Congress186 in May 1995 (which included, for the first time, leaders from Eastern European states) was expressed by ETUC President Verzetnitsch: ‘[t]he fact that our economy has been Europeanized obliges us to Europeanize our democracy and trade union power’ (Europe, 10 May 1995:11).

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In October 1996, the ETUC’s Executive Committee adopted Internal Rules of Procedure in order to clarify the procedures for taking decisions to negotiate, determining the nature of the mandate, carrying out the negotiations and evaluating the results (interview with ETUC official). Accordingly, the ETUC’s Brussels Secretariat was to lead the bargaining delegation.187 If Eurocollective negotiations lead to a draft agreement, the final vote is taken by QMV according to the relevant procedure of Article 16 of the ETUC Constitution, applied to the organisations concerned by the agreement. Indeed, both the Parental Leave and the Part-Time Work Agreements were adopted by a majority of the ETUC members only. In the part-time case, six votes (out of 33) were cast against the deal: two German unions (Deutscher Gewerkschaftsbund (DGB) and Deutsche Angestelltengewerkschaft (DAG)),188 the French Force Ouvrière, the Christian-Democrat Luxembourg union (LCGB), and the European industry federations of train and construction workers were opposed (interview with ETUC official, July 1997). Various other Industry Committees abstained. This may be seen as an indicator of the de facto supranationalisation of the ETUC which previously had been considered not to be able to ‘afford to antagonize its larger member organizations’ (Ebbinghaus and Visser 1997b:9). The DGB in particular, which was traditionally considered a powerful affiliate especially prone to block decisions despite majority voting (Roethig 1995:276 with further references), was outvoted. The largest cross-sectoral management organisation at the Euro-level,189 UNICE, assembles the member states’ top associations representing both industrial and (increasingly) employer interests. By the mid-1990s, UNICE had 34 affiliates from 25 states (see EuroAS 5/1996:81). That the single governments which are lobbied by the national federations can no longer individually block decisions made Euro-level interest representation gain in weight during the late 1980s and 1990s (e.g. Lanzalaco 1992:192; Collie 1993:218ff., 226). In turn, UNICE had to change some of its former strategies (see section 2.2) when QMV—after a considerable time lag compared to economic integration—threatened to reach social policy. In the ‘shadow of law’, it chose to negotiate. At about the same time, an organisational reform started which strengthened the Secretariat with a 40 per cent increase in UNICE’s budget (see e.g. Lanzalaco 1992:186ff). A change in UNICE’s statutes was passed in June 1992 to meet the challenges of the Social Protocol. The organisation was formally assigned the task of representing its members in the dialogue between the social partners provided for in the Social Agreement (Article 2.1 of the Statute). The UNICE Council of Presidents is in charge of defining the attitude to be taken ‘in the framework of the dialogue between the social partners’ and to approve any results negotiated (Article 6.3, UNICE Statute). This

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was an important innovation against the widespread expectation that the employers’ Euro-federation continues to lack a negotiating mandate from its members. What is most important: UNICE ‘has developed a decisionmaking style which does produce agreement’ (Collie 1993:225). In principle, the association can approve proposals unless three member states vote against it (see Article 7.2). With a view to collective negotiations, however, the 1992 reform provided for specific rules to apply: ‘any draft agreement negotiated in the framework of the dialogue between the social partners’ is to be ‘approved by the Association on the basis of consensus among all the members affected by the agreement in question’ (see Article 7.8). Although this reform certainly broke the pre-Maastricht tradition that ‘UNICE’s members have modified the confederation’s structure only to give themselves greater control over their Brussels-based representative’ (Gorges 1996:55), it was not enough to immediately cope with the challenges of postMaastricht EC social policy. UNICE could not overcome the non-approval of the last-minute compromise concerning European Works Councils by its British member the CBI in March 1994 (see section 4.1). Subsequently, the ‘rules of the game’ were clarified for the future, both within and between labour and industry associations at the European level. An internal agreement of UNICE specified that the CBI would continue to participate but not have a veto right in negotiations pursuant to the Social Agreement. On the other hand, the CBI would not be bound by an agreement it did not approve of.190 This was another indicator of a slow decay of unanimity within UNICE’s internal structure, even in the one issue area where the veto power of UNICE affiliates has not yet been abolished in the Statute.191 CEEP, the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest, organises a very heterogeneous group. Interest aggregation at the Euro-level is often hampered by different internal structures and by diverging interests of the CEEP affiliates who may even sometimes be direct competitors (see the former CEEP Secretary-General Ellerkmann in EuroAS, 5/1996:82). Originally, most affiliates came from the energy, transport, telecommunications, banking and postal services sectors. Over time, public authorities (regions, communes, etc.) also joined, especially from the Scandinavian countries. Originally, the voluntary interest representation of public enterprises tackled specialist issues only. Over time, however, more general issues were added. CEEP sees itself as the voice at the Euro-level for public facilities which are in constant decline (interview with CEEP Secretary-General Fredensborg, July 1997). By the early 1990s, CEEP affiliates employed approximately 9 per cent of EC employees in the nonagricultural sector (CEEP activity report 1993:45). CEEP was less reluctant than UNICE to enter into binding Euro-level

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agreements with labour. The public enterprises welcomed ‘the role given to social negotiations’ at Maastricht (CEEP activity report 1993:57). The ‘strong social traditions’ of public enterprises tend to be stressed (ibid.). In the same way as the ETUC and UNICE, the much smaller Euro-negotiation partner CEEP192 also amended its Statute with a view to the post-Maastricht social policy patterns. In November 1994, CEEP was given the task of exercising ‘all the prerogatives and obligations relating to its status as a social partner which arise in particular from the social protocol attached to the Treaty on European Union’ (Article 3 of the CEEP Statute). In September 1996, the insertion of a new chapter VIII in the CEEP Rules of Procedure specified the participation in negotiations under the Social Agreement. The CEEP delegations must include the Secretary-General or a deputy appointed by her/him (ibid.: Article 46). Approval of collective agreements is up to the General Assembly and ‘shall be voted on in accordance with Article 12 of the Statutes’ (ibid.: Article 49) which was not amended since 1994, i.e. on the basis of a simple majority of the members present or represented. UEAPME, the ‘Union Européenne de l’Artisanat et des Petites et Moyennes Entreprises’ is a well-known group within the realm of the Social Agreement, without in fact participating in the relevant negotiations. It was set up in 1979 by various European associations of the craft sector and of medium-sized enterprises but only became active in 1991 (interview with official). By the mid-1990s, UEAPME claimed to represent 5 million enterprises with approximately 20 million employees (UEAPM E information brochure: 7). It has affiliates in all 15 EC member states, but there is over-proportional weight of German and French members according to the number of enterprises represented.193 In the Commission’s Communication on the application of the Social Agreement, UEAPME was only acknowledged as a cross-sectoral organisation representing a specific type of enterprises. Thus, it was distinguished from the cross-sectoral associations with a general purpose. Indeed, UNICE claims to have more small and medium-sized members than UEAPME (interview with UNICE official, April 1995). Nevertheless, UEAPME claims the status of a European social partner on the same footing as UNICE, CEEP and the ETUC, and denies the representativeness of the ‘big three’.194 It issued a legal complaint against the Council for implementing the parental leave deal, and it announced it would do the same with the atypical work Agreement (communication to the information meeting of DG V on 25 June 1997). The first court case ‘will probably take at least another two years’ (letter from UEAPME official to the author, 3 July 1997), but it has already aroused various reactions on the part of the other major actors under the Social Agreement (notably the inclusion of specific organisations as observers in the part-time deal; see section 5.3 on representativeness).

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5.2 The development of a negotiation pattern It is beyond doubt that at least up to the 1990s, the system of interest representation at the European level cannot be compared with the centralised, monopolistic, co-operative ones in some ‘classic’ corporatist nation-states. While many analysts have pointed this out (see section 1.2.2.2), less attention has so far been attributed to recent developments prompted by the Social Agreement. Right after the Maastricht summit, even Commission officials in the social dialogue Directorate and ETUC leaders did not believe that Eurolevel collective agreements would be concluded, except in the very long run. The same was true for social policy experts in the member state’s national representations in Brussels (interviews, January 1992). Industrial relations experts were rather sceptical concerning the probability of relevant Euro-level developments (see e.g. Streeck 1995b:117). As opposed to the national level, where informal practice usually preceded codified structures of corporatist policy networks (and e.g. the Austrian experience shows that legal rules are not necessary at all), the post-Maastricht EU disposed of a detailed legal framework without relevant practice. If the rules were to become ‘alive and kicking’, a negotiation culture had to be developed.195 As outlined above, significant internal reforms occurred within both the labour and the management camps (although to varying degrees), in the direction of more action capacity and a ‘supranationalisation’ of the interest groups. These changes within both of the institutions were complemented by an incremental development of what might be coined a culture of social partnership. Already by autumn 1995, the representatives of UNICE, CEEP, and ETUC were meeting each other on average three times a week (partly with the Commission being present). ‘We know each other very well since the Social Agreement. A group of people with confidence and mutual trust is developing’ (interview with former CEEP Secretary-General). By 1997, the leading social policy persons of these three organisations co-operate ‘basically on a daily basis’ (interview with UNICE representative). In addition to these horizontal contacts (between societal groups), there is also vertical integration (between societal groups and ‘the state’). Interviews suggest that the contacts between the European party federations and their ‘allies’ within private interests are increasing. Furthermore, a ‘Trade Union Intergroup’ of the EP has met on a monthly basis since 1994. MEPs, representatives of the ETUC’s Brussels office, and union representatives from the member states discuss topical issues and try to co-ordinate their positions (see Eder 1997:28). In ‘its dealings with the European Parliament, ETUC enjoys a close relationship with the Social Affairs Committee, which shares its objectives’ (Collie 1993:223 with further references).

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The Commission has always been open to outside specialists joining their rank and file (often on expert contracts), and DG V seems a special case because it includes personalities with a union background even in highest positions.196 But also on the side of industry, job-hopping is an essential asset for leading positions (interview with CEEP Secretary-General).197 Beyond mutual acquaintances and simple contacts and co-operation on a non-binding basis, a specific collective bargaining culture seems to be building. From the parental leave and the part-time deals, we see a stable pattern of negotiations evolving. In both cases, the plenary negotiations consisted of two teams of twenty-eight persons each, plus chairperson Walgrave and her secretary (and translators). On both sides of industry, there were at least seventeen representatives of national federations (from the EC member states, Norway, and Iceland) plus representatives of specific Euro-level organisations. For labour, twenty-two national federations and three Eurolevel professional associations were represented in the first negotiations. In the second run (i.e. on atypical work), the number of national organisations was lowered 198 with a view to allowing more Euro-level sectoral representatives. In addition to eight persons nominated by the industrial committees, there was one representative of the ETUC Women’s Committee. Two persons represented the ETUC Secretariat, one of them being the head of the labour delegation (in both cases, this was Jean Lapeyre). The head of the management negotiating team was, in both cases, the Irish chair of the UNICE commission on social affairs. Clearly, a group of more than fifty people is too large to actually negotiate. Therefore, a negotiation style was developed which gave much more influence to a small insider group than the above outline would suggest. It is important to mention that as a rule, only the two heads of the delegations (plus the president) spoke in the plenaries. All the details were actually tackled in the drafting committee. This groupe restreint consisted of only seven persons, of which the Secretary-General of CEEP is said to have been an observer, de facto.199 It is interesting to note that for two of the three interest groups, the negotiations were de facto conducted by personnel of the Brussels central offices. In the case of UNICE, the head of delegation was the head of the Social Affairs Committee who is a representative from a national group. However, there will doubtless be significant pressures to shift the work load towards the central office, if only for logistic reasons (availability of secretarial staff trained in communicating with the member organisations, mailing routines, permanent presence in Brussels which means less travel costs in terms of both time and money, etc.).200 The languages in the Euro-collective negotiations, in fact, support centralisation, too. While several languages are spoken (and translated into)

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in the plenaries, the drafting committee would exclusively use English and French, sometimes even English only, without translators. The working languages for written texts are English and French with German being added at a later date in the negotiations (interview with negotiator). Sometimes, compromise draft proposals would be submitted by the delegations in only one of the two major languages, so that an ad hoc debate was only possible for those with respective language skills. It is obvious that proficiency in both English and French combined with the knowledge of the quite specific vocabulary relevant for such negotiations are of outstanding importance. This is the case with central staff members of the Brussels offices, while representatives of the national confederations might find it more difficult to compete in that regard. All parties confirm that the role of the negotiation’s president was restricted to technical functions. Reportedly, management would not agree to have even a compromise draft developed by the chair. Ms. Walgrave herself stresses that a clarification of the role of the president is crucial. She wanted to clarify whether this function should be a conciliating one or one of chairing only (i.e. guaranteeing the ‘collective memory’; see Walgrave in Notabene, 1997/100:13). For the general character of the Euro-collective negotiations to date, it is essential that there are in fact only two negotiating teams. Although two crosssectoral organisations represent management interests in the social dialogue, one of them (i.e. CEEP) is de facto a minor partner. It seems that the Secretary-General who represented CEEP in the plenaries never actually spoke (interview with a participant). In the internal material of labour (i.e. the opposing party), the management delegation was referred to as UNICE/ CEEP (instead of: UNICE and CEEP). At times, the smaller partner was simply not mentioned at all (and this is the rule rather than the exception in interviews). It seems that although CEEP has quite specific interests as an industrial organisation (public enterprises fear that the majority of UNICE members would rather opt for abolishing than for supporting non-private industry), CEEP’s members’ interests as employers do not in principle diverge from UNICE’s.201 This means that with a view to employer (as opposed to producer) interests, the groups are in fact noncompetitive (which was a crucial characteristic for a corporatist group set-up according to Schmitter’s 1974 definition; see Chapter 1).202 Between the two opposing parties within Euro-level collective negotiations, significant differences persist with a view to the internal structure of either team. The ETUC claims to have proceeded at a faster pace towards institutional reforms which will have to be followed by the employers. Three aspects support this claim: formal majority voting; sectoral representation within the Euro-federation;203 and inclusion of members from the former Eastern Bloc countries204 (interview with Jean Lapeyre). A first

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step towards sectoral interest representation on the employer side of the EC macro-level collective negotiations was, however, taken by UNICE in the second negotiations under the Social Agreement, on part-time work: the major groups representing members particularly affected by atypical work (i.e. the industrial cleaning, retail, and hotel sectors) were included in the plenary negotiations, as ‘experts’ and observers.205 With a view to majority voting, the situation might in the near future become even more difficult. According to an internal UNICE agreement, the British CBI was only an observer without veto right in the collective negotiations to date. This will certainly change as soon as the UK is no longer excluded from the scope of the post-Maastricht social policy rules. Commission and ETUC sources assume that pressure to formally switch to majority voting will then be overwhelming. Legitimacy might be at stake if due to a small minority, all employers all over Europe might be denied the right to choose the collective negotiations route. Although there are some indicators of a Euro-culture of collective negotiations in the making, much remains to be accomplished in the eyes of the chair in the two concluded collective deals, Walgrave (see Notabene, 1997/100:13). She mentions that often, the negotiators are either specialists in European affairs without much technical knowledge or national specialists who hardly know the systems of other member states. At some points, it seems that national alliances have formed where both the employers and the workers from one member state tried to protect their national system or collective agreement. ‘“Penser européen” est quelque chose qui doit encore se créer’ (Walgrave quoted in Notabene, 1997/100:13). She furthermore recommended that instead of each delegation and partly even each negotiator working with their own information, there should be a collective starting point from a dossier on the national legislation and practices as well as statistics (ibid.). In any case, it is no longer true that ‘[t]he most striking aspect of the relationship between business and labour at the European level is the absence of significant dialogue or meaningful exchange’ (Roethig 1995:271). 5.3 The issue of representativeness Since the Social Agreement’s corporatist procedures were first put into effect, criticism regarding ‘monopolist’ tendencies in its practice has not ceased. Among those who want to be included in the decisive core of the social policy community are the UEAPME (representing small and mediumsized enterprises) on the employers’ side; and the CESI (representing independent trade unions) plus the CEC (representing professional and managerial staff) on the workers’ side. Confronted by a sudden interest from several small and formerly less

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visible interest groups, the Commission had a difficult task defining a procedural codex for the management of the Social Agreement’s procedures. The major issue was the operationalisation of the term ‘management and labour’ (English version) in the Social Agreement—i.e. ‘the social partners’ in e.g. the German version. In its Communication on the implementation of the Social Agreement (COM[93] 600 final of 14 December 1993: paragraph 22 ff.), the Commission established a set of criteria for the organisations to be included in the consultations preceding legislative proposals pursuant to the Social Agreement. Those are: • being cross-industry or related to specific categories and being organised at the Euro-level; • consisting of organisations which are themselves ‘an integral and recognised part of Member State social partner structures’, having the capacity to negotiate agreements and being representative of all member states ‘as far as possible’; • having adequate structures to ensure an effective participation in the consultation process (see point 24). Based on an internal study of the various Euro-level trade union and employers’ organisations,206 the Commission established a list of organisations which broadly fulfilled those criteria, subject to review in the light of future experience. This list included, in the first place, the three general crossindustry organisations UNICE, CEEP, and ETUC. Furthermore, there were three organisations at the level of cross-industrial representation of certain categories of workers or undertakings; one specific organisation (Eurochambres); and twenty-one sectoral organisations outside a crosssectoral federation (although some of them were only included because they had urged the Commission to do so; Annexe II: 2).207 At the same time, the Commission stressed that the social dialogue between UNICE, CEEP and ETUC had resulted in a wealth of experience, and that it had taken notice of the three associations’ suggestions for the implementation of their 1991 Agreement (pt 25 of Commission Communication). The Commission emphasised that it did not want to be restrictive with a view to the consultations, although it was explicitly aware of the dangers of overcrowded action (pt 26). At the same time, it would promote the development of new liaison structures between all social partner organisations, 208 in order to facilitate and improve the process of consultation. Small and medium-sized enterprises would be given special attention (pt 26). With a view to the negotiations under the Social Agreement, the Commission chose a pragmatic approach: it was left to the social partners

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to decide which of the consulted associations might enter into negotiations in order to conclude an agreement. This followed the logic of freedom to choose one’s own contractual partner which is current practice in most states (see study on the social partners, Annexe I I of Commission Communication: 3). Despite this formal leeway for private interests, the Commission secured significant influence. It has two chances to run a ‘representativeness check’ during the elaboration of post-Maastricht EC social law. First, it may choose not to stop legislative activity although some interest groups ask it to. The Commission announced it would judge on a case-bycase basis, taking into consideration both the character and the impact of a proposal and the possible effects of a collective agreement (pt 30). Second, the Commission may sanction non-representativeness of signatories by not submitting to the Council any collective agreement concluded by groups which it does not consider to be representative. The criteria at this stage are the mandate of all signatories to represent their members, their negotiating mandate, the legality of the provisions regarding EC law, and the respect of the Social Agreement’s provisions on small and mediumsized enterprises (pt 39). In its conclusions, the Commission stressed that there should be room for natural developments of the new procedures in a dynamic process. The creation of heavy structures would only lead to suboptimal outcomes (pt 49). The Commission’s approach has been considered ‘likely to cripple any effort to exploit these provisions of the Maastricht Accord for proto-corporatist purposes’ (Traxler and Schmitter 1995a: fn. 2). Indeed, the Commission may not have seized its chance to formally designate only the three Val Duchesse top associations as possible ‘social partners’ at the cross-sectoral level. However, the Commission’s strategy can also be seen as a tactic to prevent legal action against any formalised narrow definition of the ‘social partners’ under the Social Agreement. Knowing that there are some shortcomings to the representativeness of UNICE/CEEP and ETUC, it seemed less harmful for the EC institutions’ image if they left it to the major groups to choose with whom to negotiate. Legal action would have been easier had there been an official act excluding some organisations from the negotiations. It is more difficult under the present circumstances where, formally, responsibility lies with the major representatives of labour and management, while the Commission and the Council only de facto ‘designate’ these actors when they accept and implement their bargaining results.209 It should also be mentioned that the smaller Euro-groups such as e.g. UEAPME were in fact only one of several challenges to an exclusive group of negotiators. The Commission was so successful in preventing national interest groups from directly participating in the Euro-level negotiations that this possibility was almost not realised in the scholarly debate. A plethora of

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social partner organisations from fifteen different member states with individual veto rights (such as e.g. demanded by the EP210 and by some experts) would without doubt have overburdened the anyway fragile negotiation process. To sum up: the Commission clearly preferred collective negotiations to be conducted by a small but workable group of Euroassociations only. The more representative and encompassing they were, the better.211 It nevertheless chose a voluntary approach. When it came to bargaining under the Social Agreement (so far, the talks on European Works Councils; the parental leave and the atypical work negotiations), UNICE, ETUC, and CEEP continued along the path of the 1991 Agreement, i.e. they did not open their ‘club’ for wider participation. In the practice of the collective negotiations under the Social Agreement, the interest group set-up was thus much less ‘pluralist’ (in the sense of organisational fragmentation and internal competitiveness between the collective negotiators) than the extensive list of organisations to be consulted may have suggested. The picture is much more ‘corporatist’ than expected by most commentators (see section 1.2.1.3). The main reasons for the oligopolistic behaviour of ETUC, UNICE, and CEEP are the beneficial effect on ‘negotiation economy’ (less actors increase the chances for compromise), on the one hand, and reluctance to state that they themselves might not adequately represent some specific interests (such as smaller enterprises or managerial staff), on the other hand. This cannot have come as a surprise to the Commission which actually had invited the three encompassing federations only to the Val Duchesse social dialogue, in the first place. It had furthermore initiated the 1991 input to the IGC with just these three major groups. It seems that the Commission considered that if the post-Maastricht social policy procedures were to have any chance of working, limiting participants to a few actors was necessary. That the Commission supported the constellation of only three negotiating parties was also confirmed when it suspended the legislative process on parental leave, on the joint request of ‘the three’ only, although it had received many more responses from interested groups during the first round of consultations. Confronted with these developments, the smaller interest federations’ protests mushroomed. At the start of the negotiations on parental leave by UNICE/CEEP and ETUC, the Commission was criticised because ‘the Commission (DG V) has set itself up as Secretariat for Val Duchesse-type social dialogue and it “contributes considerable financial support to this exclusivity”’ (Europe, 8 June 1995:14, quoting Secretary-General Müller of UEAPME). Clearly, protest did not stop after the conclusion of the first collective agreement, on parental leave (see overview in EIRR 264:4). For example, member organisations of the CEC jointly voiced concern about

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the refusal by ‘the three’ to include further organisations. They indicated their willingness to ‘conduct action to refuse the results of negotiations in which they do not participate, insisting on the fact that the existence of problems specific to management is eclipsed’ (ibid.: 15). Nevertheless, only UEAPME threatened a legal challenge to the parental leave deal (see Europe, 16 December 1995:14), while all other groups chose a less confrontational tactic.212 In a letter to Commission President Santer and Commissioner Flynn, Secretary-General Müller reiterated objections to the framework Agreement due to a lack of representativeness of the signatories. He also put forward criticism regarding the content of the framework Agreement, mentioning ‘problems that could have been resolved had UEAPME been able to take part in the negotiations’ (ibid.). Mainly, he rejected protection against redundancy during parental leave in small and medium-sized enterprises (exemptions were desired) and the right to take parental leave until the age of 8 (it should be restricted to early childhood). None of these critical voices could, however, convince the Commission that UNICE/CEEP and ETUC were not representative when striking their deal on parental leave. In its explanatory memorandum to the relevant draft Directive to the Council (COM[96] 26 final: point 10 of statement), it stated that the three signatories had already participated in the Val Duchesse social dialogue, and that they indeed had suggested the Social Agreement’s provisions on consultation and collective agreements. They were again classified as the only cross-sectoral federations with a general purpose fulfilling the conditions mentioned in the Commission Communication on the application of the Social Agreement (see COM[93] 600 final: pt 24 and appendix 2). The political weight of the contending smaller groups was somewhat counterbalanced when the Commission mentioned that various other organisations had indeed welcomed the Parental Leave Agreement’s flexible character which allowed it to take into account specific interests at the stage of implementation in national law (COM [96] 26 final: pt 14 of statement). As a gesture of co-operation, the Commission organised an information-exchange meeting with all interest group federations which were consulted on parental leave (EIRR 267:23). The criticism expressed on that occasion did not prevent the Commission from submitting the collective agreement to the Council for implementation throughout the Community. Some national governments reportedly voiced concern about the issue of representativeness. Nevertheless, the parental leave Directive was adopted unanimously and without changes.213 It seems that the Council, too, indeed prefers a workable collective negotiation pattern when compared to a more representative but, in terms of results, less promising one. At the time of writing, the law suit issued by UEAPME is pending. Yet, it is hardly conceivable that the EC Court of Justice would open ‘Pandora’s

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box’ and actually hinder the development of effective collective bargaining at the European level by an increase in the number of participants against the will of the key actors. Furthermore, the implementation instrument of Council ‘decision’ as provided for in the Social Agreement does in some way remove the substance of any such complaint. If a Council Directive on a Commission proposal is considered a legitimate instrument in the realm of the Social Agreement, why should that Council Directive be considered less legitimate on a proposal by the Commission which is based on a collective agreement by the three major top federations?214 We might therefore, in the long run, rather expect the selective and voluntary integration of some smaller groups into the evolving structure of Euro-collective negotiations, under the umbrella of either the ETUC or UNICE (as already experienced in the atypical work case, see section 4.3). The implementation of the Part-Time Agreement by the Council and the opinion of the EP215 on this case will reveal whether all advocates of a wider participation at the Euro-level negotiation table might be contented by such a development. Concerning the participation of UEAPME in future negotiations, Commission sources consider that the only solution would be a political agreement between UNICE and UEAPME. But two meetings between the respective presidents did not bring any progress. Reportedly, the situation was being interpreted as a zero-sum game. UEAPME also refused to participate in the atypical work negotiations as an expert/observer on the same basis as three other groups (interview with UNICE official, July 1997). It furthermore refused to participate in one of the national delegations from either Germany or Italy.216 To sum up, it is true that none of the EC institutions has indeed designated by decree, a monopoly status for a few interest groups in representing status management and labour as mentioned in the Maastricht Treaty (see e.g. Ebbinghaus and Visser 1997b:17). However, I would argue that at least so far, ‘the three’ (i.e. UNICE/CEEP and ETUC) have nevertheless gained quasi-public status. Both the Council and the Commission have contributed to this by stopping legislative processes when those three started negotiating, and by making their Agreements binding for all EC citizens. 5.4 The role of the ‘state’ Scholars increasingly argue that the EC may be assimilated to a state in many significant aspects, from an ‘internal politics approach’ (see Aspinwall 1995:479). This is not the place to continue the debate on which aspects of EU politics parallel which specific form of the state (but see Caporaso 1996). It is, however, significant for this study that the corporatist approach to policy-

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making (see section 1.2.1) perceived ‘the state’ (in whichever form217) to be a constituent actor in the organisation of collective interests in society (e.g. Streeck 1994c:9). While pluralism was typically connected with a clear separation of state and society, the state was from the corporatist viewpoint seen to be engaged in encouraging or even regulating the activities of associations (e.g. Schmitter 1982:260). This feature was consequently employed for the ideal-type corporatist policy community (see section 1.2.1.1). In their paper on Euro-pluralism, Streeck and Schmitter (1991:200) noted the absence of a mutually organising interaction effect between labour, capital and the state which could prompt corporatist patterns at the expense of pluralist pressure politics. Many writers have since pointed to the perceived absence of a ‘state’ as a hindrance for the development of Eurocorporatist patterns (e.g. Traxler and Schmitter 1994:46ff, 1995a:213; Obradovich 1995:270ff). The developments under the innovative postMaastricht social policy rules, by contrast, suggest that no fully-fledged state in the traditional sense is necessary for the backing of corporatist cooperation in the policy process. Rather, the state capacity of the EC in a policy network’s specific issue area matters. Indeed, the Commission—in fact Commission President Delors with some collaborators from his Cabinet and DG V218—was by no means passive with a view to the post-Maastricht public-private interactions in EC social policy-making. There are many indicators that the Belgian proposal to the IGC, which was the first one asking for Euro-corporatist procedures, was indeed initiated by the Commission (see section 3.2.2). The relevant Director General in DG V, Degimbe, was actually Belgian. Several interviewees have pointed to the fact that the then Head of the Directorate ‘Social Dialogue’ in the EC Commission, Savoini, was very close to the Belgian ministry of social affairs (interview with CEEP official). The Commission was also essential in the negotiations on the 1991 Agreement between the social partners (see also Ross e.g. 1995b:379ff.; 1997:9ff.; Gorges 1997:20; interview with Carlo Savoini, October 1995219). It had a supportive role in logistic (providing rooms and interpreters) as well as in political terms. In fact, Director General Degimbe even chaired (at least) the final meeting between ETUC, UNICE, and CEEP (interview with Commission official). Reportedly, the Commission had significant influence on the substantive results. As outlined above (section 3.2.2), this ‘arranged agreement’ (a Commission official, July 1997) had been intended as just another input to the IGC. It finally went into the Treaty almost without changes when at the climax of the Maastricht summit, Delors suggested the terms of the Social Agreement. By initiating these first cross-sectoral negotiations, the Commission had an impact both on the results of the IGC and on the structure of interest representation

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in EC social policy. During the eight months of negotiations on the 1991 social partner agreement, important developments occurred on both sides of industry. Further intra-group reforms were decided when the postMaastricht social policy rules were being put into practice (see overview on the changes within the single groups, section 5.1). In the Maastricht Treaty, the involvement of the Commission in the social dialogue (in the wide sense) was even strengthened in EC primary law. The Commission was once again encouraged to get involved in the social partners’ activities. Already in the 1987 Single Act, Article 118b of the EECT had mentioned that the Commission should ‘endeavour to develop the dialogue between management and labour which could, if the two sides consider it desirable, lead to relations based on agreement’. In the 1992 Social Agreement, the Commission was explicitly assigned ‘the task of promoting the consultation of management and labour at Community level’ (Article 3.1). Furthermore, it ‘shall take any relevant measure to facilitate their dialogue by ensuring balanced support for the parties’ (ibid.). This is far from the classic pluralist pattern of purely accepting the given pattern of interest representation and the passive reception of lobbying by the government authorities. Indeed, the Commission has in its Communication on the application of the Agreement specified three types of support it will give to the social partners: organisation of meetings; support for joint studies or working groups; and technical assistance necessary to underpin the social dialogue (pt 6 of summary). There are many indicators that the Commission is busy in all of these areas (see Chapter 4 and section 5.1). In addition the Commission has a great deal of bargaining power without directly participating in the negotiations, simply because it supplies the social partners with a document that constitutes the starting point and basis of their talks. Thus, the Commission’s power of initiative is extended to the corporatist procedures.220 Another important means of Commission influence under the Social Agreement is the publicised conclusions drawn from the consultations with social partners. Here, the Commission tactically uses its position as a process manager to shift the balance more in the direction of regulative intervention if the latter is considered useful.221 The EC Council plays a twofold role. First, the governments are (at least de facto) needed for the implementation of collective agreements because the Euro-groups seem neither willing nor capable of doing so on their own.222 Second, the Council and the EP as the two budgetary authorities have on many occasions agreed to give money to the major interest groups under the social dimension (the Council accepted the EP’s (and the Commission’s) option for such budgetary lines; see also e.g. Ross 1997:7). The ETUC in particular has, since its foundation, received strong financial backing from the EC (see section 2.2; Roethig 1995:275). It is estimated that the total

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Commission contributions to ETUC-related activities amount to around 4 million ECU each year, not yet including support for pilot European Works Councils (Greenwood 1997:168 with further references). The Maastricht Treaty provision on ‘balanced support’ for the social partners seems to have implicitly pointed to the fact that means for supporting the social dialogue and especially transnational labour-industry contacts had for a while been paid mainly to the ETUC (and to smaller groups, including UEAPME, e.g. via research projects and seminars). This was because UNICE had not accepted outright funding by the EC, while the ETUC definitely needed it. Only in 1995, when the Commission considered continuing such distribution of means with the argument that if not the payments, at least the offer should be presented to both sides, did UNICE decide to accept funding for the purposes of specific tasks such as background work or research (as opposed to the day-to-day running of the federation; interview with UNICE official, April 1995). Still in 1995, a ‘European Centre for Industrial Relations’ (CERI) was set up in Florence, with support and money from the EC. It brings UNICE, ETUC and CEEP together with the European University Institute (see Social Europe, 2/1995:8). Its aim is to promote a European culture of industrial relations by providing training in social dialogue at Community level and by increasing mutual information on national industrial relations systems (see COM[95] 445: pt 2).223 In short, under the Social Agreement there are many indicators of what Streeck and Schmitter (1991:204) called a ‘mutually organizing interaction effect’ between the state (here the EC institutions) and the social partners. The absence of support structures such as a legal framework for bargaining or for the conversion of collective bargaining results into national law may have been an important reason why multinational collective bargaining did not appear for a long time (Visser 1996:37; Ebbinghaus and Visser 1994), but under the Social Agreement we witness a change. Quite obviously, the ‘indispensable contribution of public power’ (Streeck and Schmitter 1991:209) to the genesis of corporatist patterns was not lacking in the post-Maastricht EC social policy network. Replacing ‘the state’ at the national level, the EC institutions are (although to a varying extent) involved in the practice of the corporatist policy community under the Social Agreement. Despite the fact that negotiations, in the narrow sense, are being conducted solely between the social partners, the co-operative policy-making style within the corporatist social policy community has thus a strong flavour of ‘tripartism’ between management, labour, and ‘the state’ (see also Bercusson 1994a:29).224 With a view to the organisational problems of both sides of industry, the practice of the post-Maastricht social policy regime has given crucial backing.225 The practice of Council implementation of

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EC-level collective agreements assures that all UNICE/CEEP members (and even non-members) have to comply. The ETUC was accepted as the representative labour association without attention being paid to either the unequal membership rates in various member states or the declining overall membership rate. Thus, both sides of industry had crucial support in coping with their essential difficulties from the associational point of view. Evidence from the Maastricht Social Agreement supports Traxler’s hypothesis that encompassing and centralized associations cannot arise from autonomous collective action, but require external assistance…. This role is assigned to the state since (re)ordering the associational system of interest intermediation according to the requirements of macroeconomic concertation is in its very interest…. [A] complementarity underlies tripartite political exchange insofar as an increase in regime governability is contingent on state assistance for increasing associability and internal governability of capital’s and labour’s associations. Relieving the state of public regulatory functions by associations’ assistance requires, conversely, relieving the associations of risks of defection by state support. (Traxler 1990:61ff. and 65) The EC social policy experience furthermore shows that against frequent expectation, the absence of a fully-fledged ‘state’ in the traditional sense at the EU level does not in principle prevent the sort of political exchange between public authorities and organised interests which leads to the development of and entertains corporatist patterns.226 5.5 Why a corporatist policy community? The incentive structure Over the past few years,…the social dialogue was not an end in itself—it also gave more legitimacy to the social and economic policies which were being put in place at European level. (Communication concerning the development of the Social Dialogue at Community level, COM[96] 448: pt 14)

Section 3.2 studied how the innovative social policy rules were set up at the Maastricht summit. It presented a detailed analysis of the historical development of preferences in both the Commission and the Council, and outlined the developments during the 1990–91 IGC. The central argument was that not only power considerations and economic interests played a role in shaping governmental preferences, and that the process of preference formation cannot be perceived as isolated from the intense interaction

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process at the EC level. This goes beyond a ‘rationalist’ framework to European integration and pays attention to the ‘social construction of rationality’ (Wæver 1990:335). That both goals and preferences of governments may be shifted due to communicative interaction with their EC counterparts and with the EC institutions does, however, not deny that actors try to maximise their perceived self-interest. The following chapter will therefore analyse a number of potentially beneficial consequences of the setting up of a corporatist policy community for the parties involved in EC social policy-making. The insights presented in this sub-section often draw on the academic literature on corporatism (in political science) and interest groups (in sociology227). In some instances, there is no written evidence that anyone has actually recognised and pursued such self-interest. Even in interviews, it was at times difficult to touch upon these issues. I nevertheless had affirmative reactions from involved decisionmakers.228 It is crucial to stress that the arguments outlined below are purely examples. They are not meant to account for a full explanation of the developments under the post-Maastricht social dimension but come in addition to factors studied in previous chapters (notably section 3.2). They frequently have obvious counterbalancing players who will not be outlined here in corresponding detail (e.g., the argument that corporatist patterns decrease the burden of governance may be offset by governmental fear of delegating public power). In short, the potential incentives for corporatist patterns as outlined below are factors which might, under different circumstances, not have come to affect the Maastricht negotiations (e.g., the self-interest of UNICE as an organisation had for a long time no chance of prevailing over the majority of its members’ lack of interest in and antipathy towards Euro-level collective bargaining). In many instances, the incentives for corporatist governance outlined in this chapter show striking parallels to scholarly accounts of national level developments in earlier times. If we acknowledge that from a policy-setting viewpoint, the EC may indeed be perceived as a governance system not unlike a state (see below and the conclusions), this comes as less of a surprise. 5.5.1 An ‘unburdening’ of the ‘state’ It is a common hypothesis of both the recent policy network literature229 and the older corporatist paradigm that co-operative forms of public-private interaction in public policy-making help the political institutions to fulfil their ever more demanding task of managing advanced capitalist societies. In the corporatism debate, an ‘unburdening of the state’ (in German: Staatsentlastung) was perceived as the central beneficial characteristic from

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the perspective of the public authorities. Several aspects were thought to contribute to this effect (see e.g. Tálos 1982:277ff): • The fact that the filtering of policy options and of ‘relevant’ interests are (at least partially) externalised to the system of organised interests was thought to increase the action capacity of the state and to minimise open conflict. • The involvement in corporatist arrangements was seen to strengthen the orientation of the major organised interests towards ‘systemic requirements’; to minimise the potential of basic disagreements; and to increase the reliability of organised interests. • Corporatism was furthermore observed to increase the acceptance of the policy output which in turn may improve implementation and increase the social legitimacy of the polity. From the viewpoint of state theory, corporatist patterns of public-private co-operation in policy-making were therefore perceived as an additional mode of governance (a Steuerungsmodus) which reflected the growing need for consensus in the process of governing the society. Indeed, much research on corporatism was characterised by an evolutionary perspective (Lehmbruch 1996:737) in which corporatism used to be perceived as a typical phenomenon in the increasingly advanced stage of capitalist industrial societies.230 Lehmbruch (1996:746ff.) argues that corporatist arrangements in the sense of co-operative public-private governance or of self-regulation of societal sectors under the condition of a respect of general societal goals (Gemeinwohlorientierung) may have played a greater role in state formation than is usually perceived (notably in the German case). Against this background, the development of a corporatist policy network at the EC level is of special interest—particularly in the field of social policy which was traditionally seen as the core area of corporatist patterns at the national level. There is no doubt that from a functional point of view focusing on the policy-making capacity (although not necessarily from a legal perspective), the EU has meanwhile acquired state-like character (see e.g. Atkinson and Coleman 1992:163ff.). This is even more obvious if we consider that the ‘state’ itself constitutes a moving target because at the national level, economic as well as political developments—not least European integration—change the character of statehood. ‘Changes in governance’ thus occur at all levels of the multilayered EC system (see Jachtenfuchs and Kohler-Koch 1995; Kohler-Koch 1996a). There is no space here to go into the details of the state formation processes in Western Europe or in relevant political science theories. Nevertheless, one specific account will be summarised here because of the striking parallels with the development of European integration.

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Alan Cawson (1978:190ff.) outlined what he called the basic elements of a ‘theory of the extension of the scope and level of state activity in response to economic, social and technological change, in relation to the requirements for an effective system of interest representation’. The development of corporatism in Western Europe as described by Cawson invites a comparison with recent developments at the Euro-level: During the early period of capitalist development the role of the state was restricted to the enforcement of a legal structure necessary for the market to function: the liberal state guaranteed freedom of contract and trade and dismantled the restrictive apparatus of the feudal economy. As industrial capitalism developed on a large scale a disenfranchised urban working class began to threaten the stability of the liberal state. The extension of voting rights to the urban proletariat represented the transformation of the liberal state into liberal democracy…. The organisation of trade unions and their political incorporation into the Labour Party ensured that working class consciousness would be moulded by acceptance of the legitimacy of the capitalist order. (Cawson 1978:190) If we look at the EC level, it was also the design of legal rules for the functioning of a liberalised market which was the first ‘state function’. This time, it was the dismantling of national restrictions to foreign trade which was the primary task. Just as the European states, the EC did not resemble a parliamentary democratic entity in the beginning. It was a government-centred institution where citizens had no role to play, either directly or indirectly. Only in 1979 did the first direct elections to the EP take place. And it was also during the 1970s that the first referenda on EC-related constitutional issues took place in single member states. These are to date the two major political opportunity structures for citizenship influence on EC-related matters (see Nentwich 1998). The functional representation of European citizens at the Euro-level would slowly grow alongside the progress of European integration. About twenty years after the foundation of the first European Community, on Coal and Steel, the ETUC was set in place in 1973 to counterbalance the much older representation of industry, UNICE. From the outset, the ETUC was pro-integration oriented and received a great deal of support from the EC. This time, the integration of worker interests in the pro-integrationist camp mattered, in addition to its integration into the partypolitical spectrum of social and Christian democracy. Up to the first world war the liberal-democratic state was laissez-faire in its economic policy, and its social concern was largely directed

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towards removing the worst features of exploitation in capitalist production…. The crucial period of change for the analysis of emergent corporatism begins with the first world war which precipitated state intervention both in the economy, and increasingly in areas of social policy…. Among the consequences of increased state activity was a growing emphasis on economic regulation and social policy in the major parties, and the emergence of functional interest associations aiming to influence and mediate state activity in various sectors. (Cawson 1978:191) At the EC level, it was the consequences of the Internal Market which prompted increased involvement in the regulation of economic and social matters. Deregulation was followed by re-regulation, at least in some areas (Majone 1996). The shifting of ever more political activity to the EC level prompted a lobbying boom. The top associations of labour and industry continuously approached the EC institutions and the governments, with a view to influencing the shape of supranational policies. At the same time, the EC needed expertise even more than the national political systems because of its greater internal diversity and its greater remoteness. For the purposes of this analysis the crucial transformation occurs when interest groups change from being private protective associations and move towards the establishment of regular and mutually supportive relationships with government. This ‘osmotic process’ is determined first of all by the state’s role as guarantor of capitalism: to perform the integrative and regulatory role which the market can no longer achieve by itself the state requires specialized knowledge and professional capability in addition to the legitimacy conferred by consultation and representation…. The interpenetration of groups and the state apparatus develops unevenly according to the changing requirements for capitalist reproduction at different stages of development. It is most highly developed and institutionalized where co-operation is most indispensable in the pursuit of collective goals such as stable prices and regulated income growth…and least developed in sectors where market mechanisms can continue to operate. (Cawson 1978:191ff.) The post-Single Market and pre-Economic and Monetary Union situation of the EU seems to constitute the sea change comparable to the post-war situation in the member states. As outlined in section 2.1, the Internal Market created functional and political pressures for EC level intervention especially (but by no means only) in social policy. The EC institutions

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have over time felt an increasing need to co-opt private interests in EC social policy-making with a view to a possible ‘unburdening’. The Maastricht Treaty, finally, set up the necessary incentives for the development of a corporatist policy community in the social policy realm. It is in line with Cawson’s approach that this is a policy area where quite obviously, the market forces alone are (at least according to a majority view) not sufficient to reach societally acceptable goals. Management and labour are in the social realm so directly affected that in times of decreased steering capacity of any political system (and the EC certainly has a particularly limited one) they appear ‘most indispensable in the pursuit of collective goals’ (Cawson, see above). Among the collective goals, social peace (despite the establishment of an Economic and Monetary Union with convergence criteria which drive almost all EC member states to rather abruptly cut social expenses in short-term austerity budgets) is crucial in the given case. This seems at present the most urgent ‘systemic requirement’ at the EU level. It relates to the above-mentioned characteristics of corporatist patterns from the viewpoint of public authorities among which is a societal consensus function, i.e. assembling all major societal forces (notably: labour and industry) behind a crucial goal. I hold that the ‘ever closer Union’ and, currently, above all Economic and Monetary Union are such major political goals. In addition, the two other above-mentioned beneficial aspects of corporatist patterns for ‘the state’, i.e. the filtering of policy options and of ‘relevant’ interests and the increased legitimacy of policies and polity, were without doubt desirable features from the viewpoint of the EC Commission and the Council. Also in the development of one of the classic corporatist systems at the national level, i.e. in Austria, the consensus of the government and the political parties that the incorporation of organised interests was a necessity for the solution of major political and economic problems was crucial (see e.g. Tálos 1982:277). Grande and Lang (1982:352) revealed that in both the Austrian and the German cases, corporatist patterns were established when economic policy goals at the systemic level seemed to need the cooperation of the unions. It is beyond doubt that the current situation at the EU level is not the same. However, there are currently major economic policy goals which seem endangered by non-co-operation by the unions, i.e. Economic and Monetary Union, wage policy moderation within it, and social legitimacy of European integration in general. 5.5.2 Labour: exit or voice? This famous dictum by Hirschman 1970 was referred to by Lehmbruch (1979b:53) who considered that the incorporation of organised labour into

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economic policy-making was subject to a ‘particular logic of exchange’ (Lehmbruch 1979a:305). The unions would (have to) accept wage restraint in return for a quid pro quo. This quid pro quo might be to obtain compensation in issue areas outside wage policy, e.g. taxation, labour market policy, or enterprise-level co-determination.231 Although this reasoning clearly referred to the cross-sectoral macro-level and to the economic and political situation of the 1970s, the logic is not alien to the recent process of setting up a corporatist EC social policy community. Economic and Monetary Union will lead to pressures on wages in many places because other mechanisms to adapt to regional economic crises (notably devaluation) are given up. Contrasting some earlier national experiences with corporatist patterns, it was industry rather than labour which had to be pressed towards co-operative public-private governance at the EC level.232 Indeed, the employer federation UNICE was extremely reluctant to abandon its non-co-operative posture. A very strong impetus was necessary for it to give in. Such decisive backing was given by both the Commission and the governments, and it is plausible that in addition to the above-mentioned aspect of an ‘unburdening’ of the EC institutions, the perceived necessity to satisfy labour demands played a role therein. The realisation of Economic and Monetary Union was the central goal of both the Commission and UNICE (plus a number of governments) within the IGC 1990–91. It was difficult but in the end acceptable to introduce the respective provisions in the ECT. Not included were social convergence criteria (i.e. certain labour market and social standards) for the qualification as a member of the monetary core group and for the macro-economic policy of the unified currency area. Because the convergence criteria established with a view to Economic and Monetary Union were known to imply short-term spending cuts which would cause significant disruption in the member states, acceptance of the new rules by the labour rank-and-file members was by no means guaranteed (and indeed, the ratification problems of the Maastricht Treaty demonstrated this). Some pay-off within the Maastricht deals for labour thus seemed necessary in order to safeguard Economic and Monetary Union. Otherwise, an exit of the ETUC or at least of some of its member unions from the integration project, i.e. an openly critical stance vis-à-vis the Maastricht Treaty, seemed possible. To keep labour in the game, it was a viable option to somewhat strengthen its voice in EC policy-making, within a corporatist social policy community.233 That Economic and Monetary Union might encounter significant de facto obstacles in case of widespread citizen protest gave labour some leverage during the time of the 1990–91 IGC. This was desperately needed for intra-institutional reasons. After more than a decade of ‘cheap talk’ about

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a presumptive social dimension to European integration, it was ever harder for the unions to defend their pro-Europe option vis-à-vis their rank-and-file members, at least in several decisive member states (notably Germany, France, Italy, the Benelux countries). Facing a growing popular dismay about the enormous distance between the ‘ordinary citizen’ and the Europolity in the widest sense, and the nagging problem of unemployment, it became of outstanding importance for all actors interested in the further deepening of European integration to allow for some satisfaction of union demands. The latter centred on a ‘social dimension of European integration’ which included a more serious ‘social dialogue’. 5.5.3 The logic of influence Meanwhile a more widely discussed factor which helped to change industry’s stance vis-à-vis binding commitments is that under the Social Agreement, QMV increased the likelihood of legislation by the Council even in the case of failure to reach a full consensus on a particular issue. The employers do not hide their utilitarian attitude towards collective negotiations under the Social Agreement. When the first Euro-Agreement was signed, on parental leave, UNICE President Périgot unequivocally stated that his organisation had entered the negotiations ‘mainly because it is convinced that agreements, freely arrived at through bargaining between employers and trade unions, can meet the needs of companies and of their employees better than directives which would otherwise be proposed’ (quoted in Europe, 15 December 1995:9). That business chose this tactical move is, however, not at all extraordinary. It follows past developments at the national level, where ‘the threat of state intervention has often shocked employers into creating central organizations’ or, for that matter into accepting collective bargaining, ‘either to prevent legislation or tailor its contents more to the needs of business’ (Visser 1996:37).234 Indeed, the backing for collective negotiations on the part of the EC authorities seems to have tipped the balance between the logic of membership and the logic of influence (on these concepts see e.g. Traxler and Schmitter 1995a, b). These notions outline a basic dilemma of interest representation: while the perspective of the logic of influence speaks for the establishment of more encompassing and centralised associations (in this case, at the EC level), the logic of membership calls for adopting more specialised and decentralised organisational structures whose interests are more homogeneous and whose members have more chances of effective participation (Traxler and Schmitter 1995a:192).235 In the case of UNICE and CEEP, the threat of increased EC social legislation clearly increased the weight of the logic of influence. This, in turn, made more effective intra-organisational structures desirable.236

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Incentives to engage in Euro-level bargaining were, under the circumstances, felt by both sides of industry, although from different angles. The ETUC, too, had to confront possible adverse effects from either formal EC social legislation with low standards or, most prominently, from the absence of EC social law. In either case, the lever of Council legislation— or of the deliberate absence of legislation—pushes industry and labour towards EC level negotiations. This threat resulting from the increased ‘state capacity’ of the EC in social policy seems to be some compensation for the absence of a capacity for Keynesianism at the EU level (or a political movement in that direction). While the latter had seemed necessary for the 1970s’ macro-corporatist concertation at the national level (see Streeck and Schmitter 1991:211; Gorges 1996:193), the former helps to build up a corporatist policy community in post-Maastricht EC social policy. 5.5.4 National groups and the logic of influence Unions in EC member states face a double challenge because the pressures of decentralisation and flexibilisation at the national level co-exist with pressures towards a Europeanisation of interest politics (see Ebbinghaus and Visser 1997a). Immobility may have appeared to be a minor evil until recently. Under the post-Maastricht conditions of forthcoming Economic and Monetary Union, however, action became ever more pressing even if looked at from the viewpoint of the entrenched national union models. In fact, the self-interest of relevant national groups in the development of Eurolevel corporatism increased with the progress of European integration (at least to some extent). From the perspective of national ‘social partners’, shifting competences to their EC federations was, for a long time, considered a loss of power. With the specific situation of multi-level governance, however, we see that the development of corporatist patterns at the Eurolevel might not be a zero-sum game after all (see Kohler-Koch 1992:99ff, for further arguments). In areas where competences are meanwhile transferred to the EU level and may be decided without unanimity, corporatist policy networks at the national level have already lost their grip. They can only win if they are able to collectively (i.e. with their counterparts from other member states within a Euro-federation) act in the supranational arena. Indeed, to be one of several participants at the higher level is certainly more beneficial than not participating at all.237 In addition to this argument, it should be noted that, recently, innovative patterns of regulation seem to allow for mutually beneficial effects at both levels. If collective agreements at the Euro-level, such as on the issues of parental leave and atypical work, are to be implemented in a ‘cascading’like pattern where politics filter down from the supranational to the national,

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sub-national and even enterprise-level, national and subnational actors might in the end even be strengthened. One particular example of this is the case of the European Works Councils Directive (see section 4.1). From the perspective of interest federations at the Euro-level such decentralisation may, in practice, help to limit the pressure for intra-group interest unification. 5.5.5 The logics of group competition and economic competition According to the ‘two logics of collective action’ described by Offe and Wiesenthal (see e.g. Grant 1995:33), labour is powerless unless it organises, while organised action is only one out of a number of alternatives for employers. It was a standard argument that this inequality can be counterbalanced by state involvement which backs labour, e.g. by threatening employers with social legislation. However, at a closer look there are also endogenous aspects which made participation in the post-Maastricht social policy regime attractive to employer groups, especially to UNICE. If we start from the assumption that institutions are not neutral but rather influence the preferences and goals of political actors, UNICE—as every institution—does not only passively ‘represent’ the membership’s direct interests (this was an important argument within the theoretical discussions on corporatism; see Chapter 1). Rather, the organisation and its representatives also have specific interests of their own which will be taken into consideration when important decisions are at stake (although often only implicitly). In this respect, it is important to see that UNICE is a cross-sectoral interest group with a (potentially) extremely large membership. For such groups, Mancur Olson has in his seminal 1965 book The Logic of Collective Action pointed to the fact that lobbying alone is not enough of an incentive to become or stay a member: The common characteristic which distinguishes all of the large economic groups with significant lobbying organizations is that these groups are also organized for some other purpose. The large and powerful economic lobbies are in fact the by-products of organizations that obtain their strength and support because they perform some function in addition to lobbying for collective goods. The lobbies of the large economic groups are the by-products of organizations that have the capacity to ‘mobilize’ a latent group with ‘selective incentives’. The only organizations that have the ‘selective incentives’ available are those that (1) have the authority and capacity to be coercive, or (2) have a source of positive inducements that they can offer the individuals in a latent group. (Olson 1965:132–3)

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Let us distinguish between the lobbying functions which UNICE has fulfilled for its members since its foundation, on the one hand, and the specific function of participation as a co-decision-maker in the corporatist policy community under the Social Agreement, on the other. When it comes to pure lobbying, UNICE is in the Olsonian ‘trap’. ‘An organization that did nothing except lobby to obtain a collective good for some large group would not have a source of rewards or positive selective incentives it could offer potential members’ (Olson 1965:133). Furthermore, UNICE is in harsh competition with smaller groups at the Euro-level which have formed during recent years. The latter may perform more specific and therefore, for the individual member, often more valuable services. The sectoralised policy-making process of the EC in particular and the internally differentiated structure of the Commission suggest that small and specialised lobbies have an advantage because they can focus on fewer and more clearly defined issues and potential access points. It is extremely difficult to supply a wide and internally differentiated membership with valuable specific information. As Olson has argued, smaller lobbies (in this case for special groups within business) are typically better able to organise their group because the advantage for the individual member is more obvious and free-riding is more difficult.238 But the new function as a major player in Euro-level collective bargaining represents a competitive advantage for UNICE vis-à-vis competing lobbies.239 It is a strong additional incentive to join (or stay in or pay more to) UNICE if this organisation has a monopoly of representation in an important policy community. This seems to be the main reason why smaller groups such as, e.g., UEAPME fight so hard to be included in the collective bargaining process. For national federations of employer organisations, UNICE becomes not only a more important organisation possessing a monopoly good if compared to more specific business organisations. An additional argument for them to become (or stay) a member is that they can expect an overproportional voice within the collective negotiations because the UNICE negotiation team consists not only of central staff members, but also of direct participants from the major member organisations. This makes, by the way, UNICE membership also extremely attractive for top representatives of national business organisations. To be a quasi-monopolist business representative (there is no competition for membership between CEEP and UNICE) in a corporatist policy community which can decide on binding rules which are later extended to cover all European employers thus amounts to having ‘the authority and capacity to be coercive’, in Olson’s terms. In short, the new role as negotiating party in the innovative postMaastricht social policy regime brings two advantages for UNICE as an organisation. First, vis-à-vis its (potential) membership because the Social Agreement results in binding EC law and is therefore to be considered

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coercive. Membership matters much more in an organisation which codecides on binding norms rather than in a pure lobby group. Second, that there is (at least so far) a monopoly for UNICE in the realm of private employers within the collective EC level negotiations. This gives UNICE a competitive advantage vis-à-vis competing organisations which are excluded from co-deciding future EC social policy. If the logic of this argument holds, Euro-level collective bargaining was in the self-interest of UNICE as an organisation which is fighting for membership and support, although not necessarily in the self-interest of all its members. The same organisational argument applies to CEEP and, actually, to the ETUC. There is, by contrast, less uniformity when it comes to the strategic economic interest of the membership of UNICE and ETUC, respectively. In fact, the member organisations of UNICE had divergent interests concerning collective bargaining (see e.g. Goetschy 1994:480; Rhodes 1995a:115; Pierson and Leibfried 1995b:454ff.; Gorges 1996:142). It was in the interest of those members with comparatively higher labour costs to see the levels in other countries somewhat lifted. This might improve their competitive position on the European scale. At the same time, they might increase their leverage in the fight for lower wages at home because EC standards would in any case be minimum standards only, in comparison to which their own national standards might well look outrageous.240 Thus, the strategic interest of the UNICE members themselves was not unequivocal (for a different analysis see Streeck e.g. 1994a:170). Nevertheless, the internal balance of this organisation might not have changed unless external conditions did. Under those conditions, however, the strong advocacy of the EC Commission and the threat of the IGC made the self-interest of the organisation UNICE (and of its employees) prevail over the direct interest of some of its members.241 5.5.6 Synopsis: the incentive structure There were thus a number of incentives for the relevant actors to participate in a corporatist policy community (see Table 5.1). Several ‘logics’ facilitated the development of a corporatist policy community in post-Maastricht EC social policy. The EC institutions could look forward to support from private interests in the difficult process of deciding and legitimising EC social policy (as well as the lack thereof). This was in the past an important aspect in the historical development of European states, and it seems plausible to draw a parallel with the growing ‘statehood’ of the EU (even if one does not expect the EU ever to mirror the ideal-typical sovereign nation-state). With a view to labour, more voice in a corporatist policy community seemed a means to fight growing Euro-scepticism among the rank-and-file at least in

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Table 5.1 Towards a corporatist EC social policy community: the incentive structure

several member states. On the employer side, it is crucial to see that the ‘rational’ self-interests were not uniform. In fact, increased involvement in EC social policy-making offered advantages if viewed from both the UNICE’s central office’s angle (the importance of the organisation vis-à-vis other groups as well as the role of its centre would increase) and from several member associations’ viewpoints (whose competitive positions might be improved by joint minimum standards negotiated at the Euro-level). In addition to these aspects, the increased identification among the governments with an EC social dimension—one of whose pillars at the EC level was thought to be social dialogue—was an important element in the setting up of the innovative procedural patterns under the Social Agreement (see section 2.2.1).

6

Conclusions and the future

In December 1991, the Heads of State and Government of the EC member states agreed on innovative Treaty provisions for social policy. At the end of most difficult negotiations which even threatened the overall result of the IGC, the UK was granted an opt-out from the social policy measures agreed by the rest of the member states. In the Protocol on Social Policy annexed to the ECT, the eleven (after 1995: fourteen) member states except the UK were authorised to have recourse to the institutions, procedures and mechanisms of the ECT for the purposes of implementing their ‘Agreement on Social Policy’. The UK’s opt-out from the social policy measures agreed by the rest of the member states was without precedent in EU history. The innovative social policy provisions of the Social Agreement came into force in November 1993 and will fully replace the EC Treaty’s former social chapter when the 1997 Amsterdam Treaty is ratified.242 They brought an extension of the Community competence into a wide range of social policy issues, including matters such as working conditions and equal treatment of women and men at work. Furthermore, QMV was extended to many more issues than before, including e.g. the information and consultation of workers. The case of the European Works Councils Directive (section 4.1) shows that the provisions of the Social Agreement actually have the potential to unblock even issues which previously had failed to be adopted for more than twenty years. Another major procedural innovation of the Maastricht Social Agreement concerns the social partners’ participation in the policy process. Most significantly, management and labour may stop the legislative procedures on social policy issues and negotiate collective agreements. Such deals can, at the joint request of their signatories, be implemented by the Council. According to this corporatist decision mode (see section 1.2.1 on this political science concept), the Council transforms the standards agreed by management and labour into binding EC law, without negotiating the substance. In a sense, this is the ‘Waterloo’ of the intergovernmentalist approach to 186

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European integration. Not only are the governments no longer the gatekeepers of national societal interests in this area. There is now EC social policy regulation without any bargaining between the governments in the usual sense.243 In cases such as the recent social partner Agreement on part-time work, the governments are in a ‘take it or leave it’ situation. The Council is still free not to implement a collective agreement of which it does not approve. In political practice, however, this will be hard to defend in public, and to the Commission and the EP. That the governments were perceived not to have much of a choice was obvious in the parental leave case. Despite strong protest from a number of delegations who criticised the fact that the social partners had far overstretched their powers by not even allowing the governments to choose e.g. the deadline for implementation, the relevant Directive was adopted by the Council within an unusually brief period. This points to the first major finding of this study: although many scholars doubted if the two sides of industry would use their powers under the Social Agreement,244 a corporatist policy community was not only set up but even proved to be effective. 6.1 Towards a corporatist policy community If we accept Manoïlesco’s belief in centennial longevity and my hunch that it all began during and immediately after World War I, then we are presently right smack in the middle of the century of corporatism and hence to live with it for another fifty or so years. (Schmitter 1974:40)

Indeed, this study suggests that corporatist patterns of policy-making and even the specific features of interest representation which were often found to accompany them (i.e. most significantly, de facto monopoly positions and state involvement in interest intermediation) still play a role in contemporary European governance. However, as outlined in section 1.2.1, corporatist patterns should nowadays not be expected to feature those characteristics which were typical for macrocorporatism in the 1970s: the cross-sectoral and encompassing steering of the macro-economy by labour, industry, and the public authorities. The state of economic development, the prevailing economic policy doctrine, and the functional differentiation of society and politics have all changed over time. It is therefore unrealistic to think that within otherwise increasingly fragmented political systems where the policy-making process is broken down in and varying across policy subsystems, corporatist patterns should still cover all crucial policy issues alike (such as the original ideal-type assumed). It seems

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that the contemporary version of corporatism is comparatively restricted in functional scope and belongs to the sectoral or area-specific level (see also Falkner 1996b).245 Current corporatist arrangements are therefore best captured by a label connected to the ‘policy networks’ debate in political science (see section 1.2.2), i.e. the ‘corporatist policy community’. As outlined in section 1.2.1.1, ideal-types of policy networks may be located on a continuum stretching from open and fluent ‘issue networks’ to ‘policy communities’ and finally to ‘corporatist policy communities’. If policy communities are already closed and stable, corporatist policy communities are in addition characterised by state involvement in private interest organisation and intermediation; by some delegation of public authority to private interests; and by de facto monopoly positions of crucial private groups. The application of this concept to EC social policy supports that there is no sui generis quality of the EU as a pluralist political system and no unidirectional development from national corporatism to transnational pluralism in Europe (see section 1.2.1). Within specific policy networks, corporatist patterns may unburden ‘the state’ at both the national and the EU levels. As in earlier processes of stabilising political systems, in particular the state formation processes in Europe, it seems that policy entrepreneurs are once again well aware of the potential in terms of consensus formation and legitimisation of an inclusion of private interests in the policy process. After all, the EU wants to fight the deficit in social legitimacy which has become increasingly topical during recent years. This speaks for the probability of at least some EU policy networks turning into corporatist policy communities. Because institutional, technical, and ideational circumstances do play a role,246 however, policy communities (and notably corporatist ones) will certainly not develop in all areas alike. From an aggregate perspective, the EU can be expected to stay a mixed system whose public-private interaction patterns vary according to sectoral or policy-specific regimes (see Cawson 1992:100). It seems that both the EU and its member states meanwhile resemble clusters of policy networks which are interconnected.247 Beyond the inclusion of actors from various levels of the EU system, the evolving Euro-polity thus stretches over a variety of actor categories. With a view to conceptualisation, the term ‘multi-level network governance’ might indicate cooperation along both a vertical and a horizontal axis: co-operative governance in the vertical direction is covered by the expression of multilevel governance; co-operative governance among multiple actor categories along the horizontal axis is covered by the policy network concept. Multilevel network governance combines both qualities: European policy-making is inclusive both regarding regional and functional participation.248 From this perspective, the EU itself appears to be a multi-network system. The European Union can be seen as a state-like entity ‘in the making’

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(see e.g. Bulmer 1994:352).249 The exciting aspect of this situation is that, as Eichener and Voelzkow (1994b:11) outlined, we now have the unique chance to study the parallel developments of both a political—administrative system and a system of interest intermediation. Since the early contributions to corporatist thinking, the active contribution of the state in creating supportive conditions for corporatist arrangements has been stressed. Studying European integration, we witness that the supportive legal and procedural backing of the Maastricht Social Agreement (see Chapter 3) and the manifold support for the crucial Euro-groups from the European institutions (section 5.4) have prompted intra-group and inter-group developments. The results of this study reveal that structure follows strategy (see section 6.2 below). While the ETUC, UNICE and CEEP underwent internal reforms with a view to increasing their decision capacity (see section 5.1), a negotiation culture slowly but surely unfolded alongside the collective negotiations under way (see section 5.2). Going beyond the above-mentioned approaches, however, I hold that the co-evolutionary aspect actually stretches beyond the common new institutionalist emphasis on the EC legal framework and the EC institutions (see Gorges 1996, 1997; Eichener and Voelzkow 1994b). Following an inclusive conceptual approach which pays attention to intersubjective knowledge constituting identities and interests (see e.g. Wendt 1992:425), one realises that the co-evolutionary process has three instead of two components. In addition to the political-administrative system (including material EC institutions and the Treaties) and the system of interest intermediation, there is the ideational dimension (including values, norms, interests, identities, beliefs; see March and Olsen 1989:17). While each level may impinge on the others, changes on the legal/administrative level alone would not have resulted in a workable corporatist policy community. The detailed analysis of the EU social dimension before, at, and after Maastricht presented in this study indicates the incremental development over time of an intersubjective understanding that ‘social dialogue’250 was a valid path through, maybe even a ‘solution’ to, the regulatory conundrum (M.Rhodes 1995a) of EU social policy. This process of joint identity formation (see below) had as far-reaching effect on public-private interaction as the Maastricht ‘grand bargain’. In actual fact, it preceded the IGC and had a decisive impact on it. In short, the EC’s social dimension reveals that just like the European states and their subsystems, the EU may profit from the ‘unburdening of the state’ which corporatist patterns offer (see section 5.5 on various incentives for setting up the corporatist EC social policy community). The findings suggest that against frequent expectation, current EC social policy-making is not in principle different from corporatist policy styles prevailing in some member states. Chapters 4 and 5 indicate that the crucial indicators for a corporatist policy community

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have developed since the Maastricht Treaty was negotiated. After a nontrivial delegation of public power to management and labour was introduced by the Social Agreement’s procedural reforms, the ‘state’ (i.e. the EC institutions) actively promoted developments in the relevant interest group set-up in order to sustain corporatist patterns.251 This suggests that no centralised classic ‘state’ is necessary to provide the crucial backing for corporatist patterns. Although the vocabulary is somewhat outdated, many of the developments analysed in this study fit Schmitter’s description of the development of neo-corporatism in various European states: ‘In a nutshell, the origins of societal corporatism lie in the slow, almost imperceptible decay of advanced pluralism’ (Schmitter 1974:23).252 Chapters 4 and 5 of this book analysed in detail how, over time, a corporatist policy community developed in EC social policy. The results fit the findings of two strands of earlier studies on EC interest intermediation in specific sectors or areas. They will, first, not come as a surprise to those scholars who pointed, in general, to the establishment of more stable and enduring sectoral patterns of interaction between the EC institutions and relevant interest groups: ‘all practitioners and scholars would accept the need for permanent relations’ (Greenwood 1995b:15, see the case studies in Greenwood 1995a). Some commentators indeed noted a similar phenomenon in the European policy-making process to the long established traditions of national policy-making in Western Europe— namely a high degree of interest group integration into the policy process, based upon the twin ‘logics’ of organisation and negotiation. (Mazey and Richardson 1996:4) The developments under the EC social dimension fit, second, with a small number of studies which already revealed non-pluralist patterns in specific issue areas. However, this study points to a new quality of multi-level network governance: social policy is a cross-sectoral policy domain which impinges on all sectors of the economy and—via its implications on the labour costs—even has the potential to influence macro-economic indicators such as employment or exchange rates.253 Social policy furthermore touches crucial issues of European identity as the ‘European social model’ is perceived to distinguish the EU from other areas, and it matters to a special extent in terms of social legitimacy. The development of a corporatist policy community in EC social policy (and consequently the lessons to be drawn in political science) are therefore even more significant than are e.g. micro-corporatist patterns in the consumer electronics industry (see Cawson 1992) or private interest governments in the fields of pharmaceuticals and biotechnology (see Greenwood and Ronit 1992).

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6.2 Group structure follows strategy follows ideations As studied particularly in Chapter 5, the major Euro-groups let their strategy follow the changed policy preferences on the part of the other EC actors, giving in to the ‘logic of influence’. But change occurred at deeper levels, too. Once the social policy regime was set up, the new framework conditions at both the levels of EU law and of EU ideology impinged on the groups’ preferences and identities: institutional choices can shape people’s ideas, attitudes, and even preferences. In this view, institutional change is important not only because it alters the constraints in which actors make strategic choices but because it can reshape the very goals and ideas that animate political action. (Thelen and Steinmo 1992:27) This is why neither labour nor industry wanted to be blamed for the failure of the social partner’s quasi-negotiations on European Works Councils (see section 4.1). In the mid-1980s, ETUC and UNICE had been umbrella organisations serving as platforms for the leaders of national groups. The latter would meet every now and then to discuss solemn common positions to serve as inputs for the EC decision-process. At least de facto, if not de jure, national affiliates could not be outvoted (and certainly not the major ones). Between the Euro-associations of the opposing sides of industry, there was little direct and no bilateral contact. In the late 1990s, all of that has changed. Even within UNICE, majority voting has been introduced. Although collective agreements on social standards are still excepted from this supranational decision modus in UNICE (not so within ETUC and CEEP!), the CBI is at the moment without veto right. This will probably change as soon as the UK is formally under the innovative post-Maastricht social policy rules. But quite obviously, the CBI’s de facto power will in future be much more limited than in the 1980s. The overwhelming majority of U N ICE members favour negotiations in the face of legislation, and outsiders will no longer be allowed to interfere with the perceived self-interest of the mainstream. UNICE is a good example that actors ‘change not only their perceptions of their interests within institutions, but also their general outlooks on their role and identity’ (Matlary 1997:208). Although the basic goal of preventing legislation was not given up, UNICE’s self-perception is meanwhile to be a co-responsible social partner. Blockades against Euro-collective negotiations are thus carefully legitimised (see e.g. the case of the European Works Councils, see

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section 4.1). The top representatives pledge to ‘believe in contractual Europe, i.e. in negotiations between the social partners’ (UNICE President Périgot, indirectly quoted in Europe, 26 February 1997: no. 24). It ‘is necessary to reach, as soon as possible, a European opinion in which everyone (and more especially all our federations, including the CBI) recognises that the trade unions are the ideal partners for us, that negotiated social partnership is the key to the future’ (UNICE Secretary-General Tyskiewicz quoted in Europe, 7 October 1996: no. 24). The self-perception of the ETUC, too, underwent significant change (see also Ross 1997:33). We are convinced that Europe is added value for our future. We must create a balance of power compared to the European employers…. We must put all our weight on governments so that they take decisions allowing for a change in direction. In short, we must create real trade union counter-power in the European dimension. (ETUC Secretary-General Gabaglio quoted in Europe, 29 May 1997: no. 13) The day-to-day working life of management and labour representatives in Brussels is no longer the same, either. The relevant officials of the three social partner organisations meanwhile work together on an almost daily basis. Contacts with the EC institutions are almost as frequent, notably with the Commission. The EC Council of social and labour ministers, in turn, no longer meets behind doors closed to the other members of the social policy community: since the Maastricht Treaty came into force, there are regular ‘informal Social Council meetings’ in the presence of ETUC, UNICE, CEEP, and the EP’s Social Affairs Committee (in addition to the Commissioner for social affairs; see e.g. Europe, 24 March 1997: no. 11; 5 July 1997: no. 12). The evolution of the EC social policy network over time is well captured by the three policy network ideal-types suggested in section 1.2.3 because each of three different periods fits one category (see Figure 6.1). The two turning points when the EC public—private interaction pattern in social policy developed from the ideal-typical state of a rather pluralist (see Figure 2.1) issue network into a policy community are the establishment of the ETUC in 1973 (see sections 2.2 and 5.1) and the 1991 Agreement on the future of social partner participation in the EC social policy process which was an input to the 1990–91 IGC (see section 3.2.2.1). Up to 1974, EC social policy was scarce but even more so was the involvement of private interests therein. In an eclectic and purely non-binding manner, various— mostly national—interest groups were asked to give their opinion.

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Figure 6.1 The evolution of the EC social policy network over time

Consultation of the ECOSOC was regular where prescribed in the ECT but without substantive impact (just like in other policy areas, as well). Only after the foundation of the European federation of trade unions in 1973, two basic societal players were available in EC social policy to be regularly consulted by the Commission as the crucial representatives of both sides of industry: the ETUC opposed UNICE which had already been set up in 1958.254 The core of a rather stable policy network was thus established (see Figure 6.2). It should be mentioned that a more fluid network periphery consisting of a multitude of specific lobbies which are voluntarily consulted persists until today. The pre-1991 policy community was not yet exclusive in the sense of a de facto255 monopoly for a few groups, in the decisive forms of involvement. This additional characteristic was only established when the EC institutions became active in organising a corporatist policy community based on a delegation of public authority and de facto monopoly positions for UNICE/CEEP and the ETUC as decisive co-actors in social policy-making. Although the borderline is somewhat fluid, the 1991 Agreement between UNICE/CEEP and the ETUC represents the relevant touchstone. If one takes into consideration this crucial input for the 1990–91 IGC, the innovative postMaastricht procedures in EC social policy were indeed shaped by those actors who constitute the decisive core of the corporatist social policy community: the governments accepted (basically without changes; see section 3.2.2.1) the details which were an official input by UNICE, CEEP and the ETUC but which had originated in Commission plans.

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Figure 6.2 Core and periphery of the EC social policy network after Maastricht

With a view to future EC social standards, the crucial question is whether collective agreements on specific policy projects can prevent deadlocks in the Council or extremely low common denominators in terms of standards (such as e.g. in the Directives on young workers, and on pregnant workers). Chapters 4 and 5 outlined in detail how the Maastricht Treaty’s corporatist decision patterns proved to be workable. The initial problems of the involved Euro-groups to get negotiating mandates from their members and to adapt their internal procedures with a view to effective bargaining were overstated in the early literature on the Social Agreement. The implementation of Euro-level collective agreements, too, is de facto unproblematic as long as the Council transforms the standards suggested by management and labour into binding EC law (such as in the parental leave and part-time cases). However, caution is necessary with a view to prospective Agreements: the involvement of and even compromise between the social partners are no panacea. Early experience already reveals that not all (and maybe not even many) issues currently debated within Euro-social policy are considered appropriate for settlement via collective agreements by the main actors themselves. This concerns topics touching on judicial principles and procedures, such as the burden of proof in sex discrimination cases and the fight against sexual harassment. Furthermore, social security issues seem outside the conventional path towards EC social law, at least for the moment. In a number of relevant matters, no ‘unburdening of the state’ is thus in sight.

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Even if issues are considered appropriate for collective negotiations by the social partners, the latter do not act outside the context of the relevant EC policy network. As outlined in Chapters 4 and 5, there is a great deal of contact and interdependence between all relevant actors of the corporatist EC social policy community. Confounding some scholarly expectations, UNICE was ready to negotiate ‘in the shadow of law’ (Bercusson 1992:185). However, this indicates in turn that the crucial question for the future of social Europe is not the stance of industry alone (and maybe not even in the first place). The attitude of the political EC decision-makers, notably the Council, matters as well. If the latter should in the future put more pressure on capital by indicating the will to adopt social regulation, the employers will have to react and will rather be ready for compromise themselves.256 The social standards agreed by ETUC, UNICE and CEEP to date were close to Council’s quasi-compromises. Chapter 4 revealed that the Parental Leave Agreement was somewhat more favourable for workers than various earlier compromise texts discussed in the Council. The PartTime Agreement is quite weak if compared to the relevant Commission draft (see Table 4.8), but both the Council and the Commission had already contemplated comparable low-ambition solutions. Just as at the national level, the Euro-level output of corporatist policy communities thus depends on the backing from ‘the state’—because the goals of labour and industry concerning most European social policy issues are antagonistic. While social dialogue has been seen as a lever to break Council stalemates, a strong possibility of Council compromise on any specific issue might after all be a necessary lever to prompt collective agreements at the Euro-level. Once again, the interdependence of all actors in the social policy community is obvious. As outlined in section 1.2.2, the literature on policy networks and European integration includes antagonistic positions with a view to the style of interaction within EU policy networks. While Adrienne Héritier (1993b) stresses rivalry between belief systems and policy options, Beate KohlerKoch (1996a) focuses on policy networks as a mode of governance which is characterised by co-operation instead of competition. In the case of the EC social policy community, conflict and co-operation co-exist. Just as in national social policy, labour and industry are opposing players with the former aiming at higher standards and the latter striving for lower production costs. As in corporatist policy communities at the national level, however, there is also a set of overarching goals shared by all members. As outlined in section 5.5, both social peace on the path towards Economic and Monetary Union and the social legitimacy of European integration (i.e. the continuation of the ‘permissive consensus’) represent such collective EU goals.257 In short, rather than conflict or co-operation, the post-Maastricht EC social policy community features conflict within co-operation.258

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Another controversial issue of the policy networks debate is the theoretical currency of this approach. As outlined in section 1.2.2, neither the network typology literature nor the network governance approach go beyond an elaborated description of various policy-making set-ups at the area or issue-specific level. With a view to causal explanation, they are thus at best models but not theoretical approaches or theories. I agree with Adrienne Héritier that ‘policy networks’ as an analytical tool should therefore be combined with a multi-analytical approach in order to explain the behaviour of network participants (see Héritier 1993b). Consequently, the ‘integration theory’ approaches outlined in section 1.1 have been incorporated into the analytical framework of this study. 6.3 Neofunctionalism and intergovernmentalism: the lessons from social policy The study of the development of EC social policy indicates that the core concept of neofunctionalism, i.e. the spill-over process, is indeed a useful tool if applied as a differentiated concept and not as a simplistic automatism. As outlined in section 1.1.1 on the basis of Schmitter’s and Lindberg’s conceptualisations, spill-over was in the frame of this study understood as based on both functional pressures (which a ‘rationalist’ approach based on power politics, economic interests, and pre-set preferences can explain) and changes on the ideational level (see also section 1.1.6). Often, they will involve institutional activism, notably by the Commission or the ECJ. In any case, successful spill-over depends on the decisions of the relevant actors. Their preferences may be influenced by new material framework conditions or by cognitive learning processes, be it at the national or the Euro-level.259 The development of EU social policy (as outlined in Chapters 2 and 4) involved a number of increases in the scope of the member states’ commitments to EU action. As ever more issue areas were included in Euro-level activities, functional spill-over occurred. Tranholm-Mikkelsen was once again proved wrong when stating that the ‘most obvious limitation of neofunctionalism is…that the logic of spill-over has been more in evidence in some periods than in others. It was prevalent until the mid-1960s and… again seems to play an important role…in the wake of the White Paper’ (1991:16). Section 2.1.2 showed that even during the so-called ‘doldrums era’ of European integration (Caporaso and Keeler 1995:36) there were plenty of functional spill-over effects to be found in EC social policy. They concerned Council Directives in labour law and ECJ decisions in the realm of equal treatment of the sexes, in particular. Even more crucial is that the level of commitment in the sense of decision modes has increased over time as political spill-over occurred. This happened

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first on the level of a more integration-friendly interpretation of existing legal competence provisions (i.e. the Treaty-base game) and later on the level of ECT reform. In addition, there are indicators of geographical spillover processes. In the case of the European Works Councils Directive, the UK was indeed less of an outsider than one might have anticipated on the basis of its opt-out. Due to the internationalised European market and the high number of multinational corporations, many UK enterprises were affected by the provisions of the Directive (notably those with big subsidiaries in other member states). In turn, the UK impinged on the policy developments under the Social Agreement (see section 4.4). Its optout de facto restricted the use of the new regulative powers among the signatories because they feared to distort competition by increasing labour costs. The innovative post-Maastricht EC social policy regime took full effect only when it was obvious that a UK Labour government would adhere before any specific measures entered into force. Spill-back, by contrast, is much less characteristic for EC social policy. Because the EECT granted very limited competences in this area, spillback was improbable from the outset. Theoretically, even major spill-backs would nevertheless have been possible (for example, a Treaty reform might have eliminated the EC task of establishing equal treatment in social security for migrant workers). In actual fact, spill-back hardly occurred.260 The overall direction in the development of EC social policy is thus characterised by spill-over. The latter happened, however, in an unsystematic and imperfect manner, giving little reason for unbounded Euro-optimism with a view to social standards. Discussing EU social policy is talking about half-full glasses (see Ross 1994). ‘Social Europe’ has in the 1990s accomplished more ‘positive integration’261 than one would have expected a few years ago. However, any overview of the de facto growth of EC social regulation (which is in many aspects well captured by the spill-over concept) gives a severely distorted impression if not supplemented by reference to the eclectic character of the EC social policy approach. Not only is there a focus on regulation (as opposed to redistribution; see Majone 1993b). In the absence of an overall concept, an eclectic patchwork of labour law standards resulted. Spill-over is not only often extremely time-consuming but sometimes seemingly impossible (e.g. in the case of worker co-decision which has been discussed under the project for a European company statute for decades). The EC social standards finally agreed may be significantly lower than initially suggested by the Commission.262 Furthermore, there remains the crucial question of whether EC social regulation actually succeeds in approximating the practical conditions in place for individuals and enterprises in the various member states. It is well known that the EU is confronted by an implementation gap in both qualitative and quantitative

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dimensions (see e.g. Siedentopf and Ziller 1988; Mendrinou 1996; Richardson 1996). This is especially so in the social policy area, where insufficient or non-implementation has led to an over-proportional amount of law suits and preliminary rulings by the ECJ. The Commission is therefore desperately elaborating proposals on how the application record might be improved (e.g. Social Europe, 1/95:36ff.). In fact, successful spillover processes prompting EC social legislation seem at best a first step towards a de facto approximation of the living and working conditions within Europe.263 Last, but not least, it is necessary to look beyond the social policy realm as such for an overall assessment of the ‘social dimension’. In fact, European integration has made another qualitative leap during the early 1990s. Above all, the Maastricht Treaty provided for an economic and monetary union with irrevocably fixed exchange rates between the participants. Effects on national labour law and social standards will be many, although often indirect (see e.g. Busch 1994). Nevertheless, the fight against unemployment was not included in the convergence criteria, and neither was a set of flanking social policy measures imposed. If by the late 1990s, the contentious issues of the ‘social dimension to the Internal Market’ have been adopted, the Single Market has long been replaced by Economic and Monetary Union as the major integration project under way. The corresponding social policy flank, however, is again a laggard.264 The analysis of EU social policy nevertheless endorses the fact that ‘neofunctionalism has proven to be a far more resilient theoretical approach than most commentators assumed two decades ago’ (Caporaso and Keeler 1995:54). However, this is no call for a revival of this school (see also Lewis 1995:17). While the insights should be appreciated, the pitfalls (see section 1.1.1) should not be repeated. While the spill-over concept proved useful, other neofunctionalist hypotheses failed to be confirmed by this study. In the realm of interest group participation in the integration process (see section 6.1 above), for example, the neofunctionalist expectations265 were proved wrong. Interests follow the integration process rather than taking the lead (see also e.g. KohlerKoch 1995:16). This supports the argument that neofunctionalism should nowadays not be treated as a ‘grand theory’ which might fully explain European integration on the basis of a few assumptions, but as a helpful partial approach (see Wincott 1995:598; Tranholm-Mikkelsen 1991:19). The same applies to intergovernmentalism. Andrew Moravcsik does not allow for EU politics as such to play a role in preference formation (see e.g. 1995:622). Although his approach incorporates a limited degree of ‘unintended consequences and miscalculations’ (ibid.: 626) on the part of the governments, learning processes at the European level which may reshape ‘national’ interests are alien to it. The empirical material presented

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in this book, by contrast, suggests that communicative processes and a joint shaping of interests in EU policy-making might in the long run be of even more importance than negotiation tactics and ‘agency slack’. These findings do not discard insights of the state centric approach to integration theory, e.g. on bargaining patterns and on the structural conditions of a joint-decision trap. The latter is a useful conceptual tool notwithstanding the fact that EC social policy actually managed to incrementally exit from the unanimity requirements, at least for most issues. In fact, the joint-decision trap and spill-over capture opposing tendencies within the integration process. Both are useful concepts for specific aspects of EU social policy developments. This indicates that intergovernmentalism is indeed as partial a theory of European integration as neofunctionalism. In fact, the search for ‘grand theories’ is hampered less by a lack of empirical knowledge or a lack of the ‘right’ causality than by fundamentals: the specific conditions of ‘parsimonious’ causal theories do not allow for more than a partial approach if complex social phenomena are at stake. This is why Tranholm-Mikkelsen suggested that the loss of ‘parsimony’ and ‘predictive capacity’ should not be deplored. Although we can discern pressures, constraints, tendencies and trends, European integration, like politics in general, ultimately depends on… acts by individual human beings. Integration cannot, therefore, be reduced to anonymous processes whose inexorable ‘laws’ it is for academics to discern. (Tranholm-Mikkelsen 1991:18) More specifically, an analysis which includes the level of ideas, interests and identities leaves us with little prospect of a neat, unitary theory because contingency models stress interconnectedness instead of causality (Sandholtz 1993:39; Radaelli 1995:178). Nevertheless, the benefits of a more holistic orientation are well captured by the common wisdom that the whole is more than its parts. With a view to the integration process, extending the analysis to include the level of communicative action and of ideations means that the old question of the pivotal prime actors at the EU level (i.e. governments versus EC institutions versus interest groups) is no longer crucial: instead of independent preferences imported from the member states and only defended by billiard-ball-like governments in the Council or its working groups, and instead of crude imposition by perceivedly independent EC institutions, processes interconnecting all actors come into focus, notably the possibility of a joint (re)shaping of preferences and even goals (which add up to identities). They involve all participants in the Euro-level process and may subsequently even trickle down into the national systems.

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The social dimension of the 1990–91 IGC is a case in point. Intergovernmentalist theorists chose ‘grand bargains’ as their prime interest within European integration. However, the social part of the Maastricht deal cannot be adequately understood without paying attention to three factors which are beyond the attention of that school: long-term interest and goal formation at the EU level (see below); transnational societal actors (see above); and the EC institutions. Section 3.2 studied in detail both the ‘competence+majority voting’ and the ‘social dialogue’ pillars of the Maastricht Social Agreement. Concerning the functional and political spill-over within EU social policy, those aspects which are traditionally stressed by state-centric and rationalist analyses are not sufficient as explanatory variables: some member states promoted this option against their economic interests. No relevant changes in their societal forces account for this, and no package deal made the governments in question give up perceived self-interests (the social policy controversy filled the very last stressful hours of the Maastricht Summit when all other dossiers were already closed; see section 3.2.1). With a view to the corporatist procedures agreed within the Maastricht deal, it is even more obvious that preferences are not always pre-set at the national level. The input from the ETUC and UNICE/CEEP came quite late in the overall negotiations (the Agreement was only concluded on 31 October 1991). On 8 November, a new Presidency draft Treaty included almost the exact wording. It was adopted in December at Maastricht without significant changes. The social partner Agreement itself had been pre-designed by the Commission and was pushed through in a quasi-coup by the Brussels centrals of the three Euro-groups: The 31 October 1991 agreement would probably never have been accepted if it had been subject to normal organisational procedures of approval, at least in UNICE. However, signed on the spot and immediately forwarded to the IGC, the agreement constituted a social fact that still happened to bind the signatory parties. (Dølvik 1997:36) In short, pre-set preferences stemming from the national level are not a realistic explanation for the origins of the corporatist policy community being formally set up under the Maastricht Treaty, either. 6.4 The role of Euro-level institutions and ideations EU level dynamics, in turn, fit in as the missing links for an understanding of EU social policy in the 1990s. Among them was institutional agency by Delors and his team, as an indispensable impetus for the social solution found at

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Maastricht.266 The arranged social partner input to the IGC and the adoption of Delors’ construction for a ‘twin-track Social Europe’ (Shaw 1994; i.e. a Social Protocol signed by the twelve including a Social Agreement among the eleven) account for the Commission’s crucial role not only in day-to-day policy-making but even within a constitutional bargain.267 For the EC policy process, too, this study indicates a greater role of Eurolevel actors than perceived through an intergovernmentalist lens. In addition to the transnational interest groups and the Commission, this concerns in particular the Court of Justice and the EP.268 All EC institutions contributed to functional spill-overs, within the realm of their powers. The ECJ actually brought about a number of spill-overs by integrationist rulings (see section 3.1.2). But even the Council is more than an assembly of autarkic national ministers: at least sometimes, it performs as an EC institution in the sense of developing and pursuing common EC interests. A telling example is the role of the EC Presidency which involves carefully balancing national and EU interests. For the sake of the collectivity’s capacity to act as a singularity (see Ruggie 1993:172; section 1.1.6)—i.e. to adopt those social measures which were perceived to be in the overall interest of the EU—presidencies at times sacrifice their own interests. Note the Greek Foreign Minister’s explanation in the case of the adoption of the Council’s Common Position on young workers: ‘I am the president of the twelve Ministers of Labour and Social Affairs, therefore I cannot vote in the name of the Greek Government alone’ (quoted in Europe, 21 April 1994:12). As outlined above, the UK Tory government proved resistant to the development of the ‘social dimension’ as a joint goal of the EU governments. Nevertheless when the Pregnant Workers Directive was adopted against the UK’s ‘national’ interest, ‘the United Kingdom, as holder of the presidency, played its role to the full, allowing the text to be adopted’ (Europe, 10 October 1992:8). Besides having the issue processed and adopted, the UK did not vote against this Directive. It even accepted the disputed legal basis of the draft which allowed for majority voting (Article 118a, ECT; see section 2.3 on the Treaty-base game). Furthermore it did not appeal to the Court of Justice as it had earlier announced it would. Once again, we see that ‘institutions give directions and provide opportunities, but they are embedded in structures of meaning. The latter is an aspect that still needs even more empirical research’ (Kohler-Koch 1997b: 12; see also Richardson 1997:31). All EU-level actors, including national governments and EC institutions, are embedded in the structures of meaning resulting from the continuous interaction with each other. With a view to the Commission, the case study on atypical work (see section 4.3) makes obvious how deeply it is embedded in the stream of relevant policy ideas. While the Commission suggested restricting part-time and temporary work

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as much as possible in its first draft Directive (dated 1982), it suggested equal treatment of part-timers in the relevant 1990 draft. In the mid-1990s, the Commission argued that promoting what was then called ‘flexible forms of work’ was crucial. Clearly, the Commission is not unaffected by the shared beliefs of the mainstream in the EC social policy community, either. Indeed, ‘[a] persuasive account of member-state constraint must draw on more than the political resources of supranational actors’ (Pierson 1996:142). This points to another EU-level process as an indispensable element for the understanding of recent EU social policy: the role of ideas and communicative action. From a new institutionalist viewpoint, the creation of a social dimension to European integration, based on both social minimum harmonisation and social dialogue, may be seen as an idea in the political system that shapes the behaviour of actors. Immaterial institutions like this provide symbolic guidance for society (see Jachtenfuchs 1995:116). Why was the Maastricht Social Agreement with its significant substantive and procedural reforms adopted? Section 3.2 revealed that a state-centric and rationalist approach (such as that by Lange 1993) cannot adequately resolve this puzzle because other than purely economic aspects expressed in pre-set national preferences played a role. When the governments came to the negotiation table at Maastricht, a long-term process of joint preference formation on the issue of strengthening Community social policy by extending competences and majority voting had already shaped the views of all governments except the British (see the national inputs to the IGC; section 3.2). The ‘EC social dimension’ with a view to backing the ‘European social model’ (see section 2.3) had already been accepted as a principled idea with a high normative validity. Social minimum harmonisation and the social dialogue—the major ‘pillars’ of social Europe in the 1990s—were accepted as goals even by those member states whose economic interest in the narrow sense was against strengthened EC social regulation (notably Portugal, Spain, Greece and Ireland) and whose national political system had no corporatist culture. Several factors facilitated the changes agreed at Maastricht (see the hypotheses on the relations between ideas and policies outlined in section 1.1.7). Although innovation was significant, the ‘deep core’ of beliefs—which includes the basic values which are hardest to change (see Sabatier 1993; P. Haas 1992)—was not touched. There was second order change, i.e. innovation concerning the causal assumptions in the policy core, involving in particular views on appropriate means and procedures of social policy intervention at the EC level. Elements of the ‘deep core’ persisted, e.g. that the EU social policy should only complement national measures, and that the social and labour law systems of the member states should not be fully harmonised. Rather, EC minimum harmonisation should supplement national policies with a view to a level playing field in the Internal Market, while processes

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(functional subsidiarity) as well as standards (minimum standards only) should be as heedful as possible of national autonomy (see also section 4.5). These framework conditions and the constant communicative interaction between the members of the policy community seem to have offered an ideal environment for the development of shared ideas and preferences (in addition to corresponding self-interests on the part of numerous actors). Also in the case of the social dialogue, causal beliefs which are easier to change than the deepest core of beliefs (see e.g. Goldstein and Keohane 1993b:10) were affected, relating to the best way to perform those limited functions which the Euro-level was in principle being given. Furthermore, the issue of ‘social dialogue’ involved questions of efficiency rather than of redistribution which are again comparatively open to ideational influence (see Majone 1993a:1). In fact, the issue was rather who should decide on the social policy legislation suggested by the Commission, than about fundamentally different approaches or standards. As outlined in Chapter 4, the results of social partner deals are (at least so far) not outside the realm of presumptive Council compromise, and this was basically to be expected from the outset. ‘Social partnership’ had served as a perceivedly good example in some EU countries, and the Commission mitigated the problem of ambiguity by constructing and marketing social dialogue as a ‘focal solution’ (Goldstein and Keohane 1993b:19; Garrett and Weingast 1993:204). In short, the Maastricht social policy reforms and their aftermath can only be understood in a historical institutionalist framework (with a ‘constructivist’ or a ‘sociological’ bias, depending on the preferred vocabulary).269 The latter points to the long-term communicative processes at the EU level regarding both EU social policy competences and social dialogue. The results of this study confirm the interlocking politics approach (see section 1.1.3) that European integration includes the states in a wider political structure (while not simply replacing it). Within the overall European structure, both the national political systems and the EU as a political system follow their proper dynamics. The evidence presented in this book shows that the shaping of preferences and even goals may also happen at the EU level. Preferences may be brought to the EU level (as intergovernmentalists assume) and then be either ‘negotiated’ only or transformed (i.e. the political elites may change the ‘national’ preference while being involved in Euro-level politics). In some cases, there may actually not be a real process of national preference formation at all, but only a process of joint European preference formation. I hold that the EU (just as its member states and possibly subnational levels in the latter) is a political system where ideas, interests, and institutions are alive and kicking. W.Wallace perceives integration as a process where the ‘functional logics of economic and technological transformation have vied with the political logics of statehood, sovereignty, national identity, and political

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accountability’ (1996:440). If we include the option of intersubjective learning and of the development of internal norms (such as, e.g., social dialogue) at the European level, the ‘political dynamics’ are, first, no longer purely state-centric and, second, no longer unilaterally favouring national responses of the ‘policy pendulum’ (on this metaphor see H.Wallace 1996). To take this into consideration helps us understand why even in a most controversial area with considerably differing national regimes like social policy, ‘European’ responses to contemporary challenges significantly increased over time. Even in the ‘social dimension’, the essence of EU-level processes is definitely not about negotiation only. The evidence presented in this book suggests that EU politics include processes of preference formation, goal definition and thus identity building. This points to the EU being more than an arena, i.e. to its quality as a polity. Indeed, to take communicative action seriously implies that preferences can no longer be assumed as fixed and leads us to ‘conceptualizing the EU as an emerging polity of collectively shared values and norms’ (Risse-Kappen 1995:13). 6.5 Which future for the EU’s social dimension? This book’s prime focus is on the development of a corporatist policy community, i.e. on procedural innovation in recent EC social policy. However, the corporatist decision-patterns set up at Maastricht cannot be explained without looking at relevant developments at the substantive level of EC social policy, before the 1990–91 IGC. Just as EC policy-making and the ‘grand bargains’ of constitutional reform are essentially intertwined in the field of interest here, so are material and procedural innovations. It comes as a surprise to scholarly expectations that by late 1997, even the most controversial issues of the Commission’s 1989 social action programme have been tackled: ‘Meagre as the Action Programme may appear, it vastly overdrew the Community’s institutional and political resources’ (Streeck 1994a:162). By 1997, the EC’s Internal Market was flanked by common rules e.g. on employee consultation on European Works Councils; on working time; on pregnant and breastfeeding workers; on parental leave; on the applicable labour law for posted workers from other member states; on the protection of young workers; and on part-time work. In the medium run, the Commission’s regulative projects were adopted—regardless of whether they belonged to an area where the Internal Market touched or devalued pre-existing national laws, or whether they were only indirectly related to market integration.270 This state of social affairs comes into even more sharp relief if compared to the EC’s initially almost non-existent social policy ambitions, and if compared to the tiring stalemates which characterised the EC Social Council during the late 1980s (see section 2.1).

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For this development, the option of QMV on social issues was of central importance. The EC’s social dimension is no longer, as it was, ‘marked by cheap talk proffered in the confident knowledge that the unanimity requirement for Council votes would never be reached and that ambitious blueprints would remain unexecuted’ (Leibfried and Pierson 1995:46). The Social Agreement (which up to the Amsterdam Treaty bound only the member states except the UK) restricted the unanimity requirement to only a few issues, on the level of primary law. This was furthermore accompanied by an intervention-friendly interpretation of the EC’s old social policy chapter: Article 118a of the ECT on worker health and safety was increasingly used to adopt measures in the wider realm of working conditions, in order to have the UK bound by such EC minimum standards. In short, social policy has ‘grown up’, it has developed into another EU policy area which is characterised by supranational procedures and dynamics.271 The evidence presented in this book suggests that even in this extremely controversial area, an incremental exit from the joint-decision trap (Scharpf 1988; see section 1.1.2) has been accomplished. In parallel, the corporatist decision gap (Streeck 1995b:110; see section 2.2.2) has been closed. Under the new social policy regime, it is in most cases no longer true that ‘all that the social interests opposed to a social dimension need is the support of one national government’ (Streeck 1995a:37). Apart from legal and practical decision modes, also the preferences with a view to EC level minimum standards of a large majority of the governments have changed. This made business finally agree to participate in a corporatist policy community (see section 6.1). The (at least partial) escape from the ‘joint-decision trap’ thus led to an end of the ‘decision gap’ at the level of organised interests. With a view to the state and the future of EC social standards, however, a major caveat is crucial. The above does not indicate that the EC will shortly replace the national welfare states, or that there will be an encompassing system of EC labour law. I do not hold that the EC social policy output is optimal in any sense, or that the prevailing style of policy-making is problemsolving rather than bargaining. But be that as it may: the evidence from the social policy realm suggests that there indeed was a gradualist selftransformation towards an institutional arrangement of greater policy potential (i.e. based on more extensive EU competences and on QMV). This does not per se indicate that the future of ‘social Europe’ is necessarily much brighter than ‘Euro-sceptical’ authors (e.g. Keller 1997:10; Keller 1993) assumed. I agree that social policy evolution in the EU is ‘more likely to be the result of mutual adjustment and incremental accommodation than a consequence of central guidance’ (Leibfried and Pierson 1995:75). I furthermore agree that a ‘social democratic…Europe, redistributing to the “losers” as markets become freer, is improbable’ (Lange 1992:256).

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But it seems no longer valid to suggest that the major obstacles to an active EU social policy role are institutional constraints in the narrow sense (notably unanimity requirements in social as opposed to economic policy issues), and a corporatist decision gap. If the EU falls short of developing a fully-fledged labour law regime, this is the political choice of the overwhelming majority of the participating governments. If the EU falls short of a degree or a quality of social state-building that is apt to counterbalance devaluative pressures stemming from the Internal Market and from European Economic and Monetary Union, the prevailing ideological and policy options seem the crucial explanatory variable. After all, contemporary mainstream views on social and economic policy issues are of a neo-liberalist and monetarist brand—even after social democratic governments have recently taken office in Great Britain and France. A common and hard European currency as well as liberalised markets are the ‘leading ideas’ of not only recent progress in European integration but also of national policy-making. Competitiveness is another hegemonic policy option which is—just like the aforementioned others—often perceived to impede increasing ‘social costs’ of employers. Against this background, it is hardly surprising that the governments currently tend to employ the pressures stemming (at least partly) from Europeanisation in order to legitimise cutting back national social expenses, rather than employing them to press for far-reaching market-correcting social intervention at the Union level.272 One may criticise this from an ideological as well as from a utilitarian point of view (i.e. taking into consideration the increasing social inequalities in European societies and their potential negative effects even in economic as well as social terms). But it is relevant not only from a political science view-point that nowadays, the crucial hurdles for social state-building at the European level are based on specific ideas rather than on institutional features of the EC social policy regime. This points to a crucial insight: the process of joint goal and preference formation studied in this book (i.e. the adoption of the ‘social dimension’ based on EC minimum standards and social dialogue) backed regulative projects which had earlier been disputed. But the development over time of a shared policy paradigm with a view to the above-mentioned aspects273 is by no means a ‘wonder weapon’ in the hands of those who favour EUlevel intervention. This is probably best expressed in the words of the new UK Labour government. That the opt-out was given up can be read as another indicator that not even the United Kingdom can escape from the development of internal norms in the EC Social Council, in the longer run: ‘My government will end the United Kingdom’s opt-out from the Social Agreement. We believe that the Social Agreement in its current form represents a sensible balance between social responsibility and economic

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efficiency’ (Minister for Europe, Doug Henderson, quoted in Europe, 5 May 1997: no. 2). However, jointly formed views in the Social Council may shift, too—and not necessarily in a pro-active direction. In the final press conference after his first European Council meeting, Tony Blair said that ‘the climate has changed considerably in Europe and that “there was no great appetite” in general for upgrading legislation’ in social and employment matters (Europe, 26 May 1997: no. 2). Indeed, the joint (re)shaping of interests and goals as well as the existence of a corporatist policy community are relevant developments in the EU social dimension. They do not, however, as such, pre-determine a more active European social policy in the future.

Notes

Introduction 1 Since the European Union Treaty came into force, there has been confusion about the use of ‘European Union (EU)’ (which is the wider label encompassing not only the former European Economic Community but also the Coal and Steel Community and Euratom) as opposed to ‘EC’ (which comprises the European Community, i.e. the former European Economic Community, only). Although ‘EU’ is always right (at least from a political science viewpoint), also the more specific label ‘EC’ will be used here to point out the social policy of the EC as opposed to the other Communities (which is indeed the case in most parts of the book). General statements which apply to all Communities will usually refer to the EU. 2 Before the 1997 Amsterdam Treaty comes into force, however, the relevant provisions are only legally binding for the member states except the UK. 3 The Union of Industrial and Employers’ Confederations of Europe (see section 5.1). 4 The European Centre of Enterprises with Public Participation (see section 5.1). 5 The European Trade Union Confederation (see section 5.1). 1 Political theory and EU politics 6 Deutsch is generally associated with this approach but he himself often quoted van Wagenen (Mutimer 1994: fn. 48). 7 For an earlier application (however, without much conceptual elaboration) of the spill-over terminology to social policy, see the seminal work by Leibfried and Pierson 1992; 1995; 1996; Pierson and Leibfried 1995a and 1995b. 8 Haas put predominant emphasis on promotional activities of interest groups to prompt integration (see e.g. Schmitter 1996a:11). 9 The expression was coined by Haas 1958:317. Geographical spill-over might be the result of non-members reacting to the customs union (Lindberg 1963:108; also the Single European Act attracted a series of new member and applicant states; see e.g. Falkner 1996a). 10 This corresponds to the insight of the late neofunctionalists that change at the cognitive level is a means of achieving greater integration rather than an end (i.e. ‘integration’) in itself. As outlined above, the ‘school’ of neofunctionalists

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seems to have unanimously shifted their understanding of ‘integration’ to the second, i.e. institutional (as opposed to cognitive) aspect. For a recent application and interesting improvement of this model see Busch 1996 who applies neofunctionalism in a case study on Economic and Monetary Union. On spill-over in European legal integration see Burley and Mattli 1993. In The Uniting of Europe, Haas quite understandably concentrated on the dynamic which he discovered, and tried to underline its importance. But many passages in Haas’ two early books implicitly (Haas 1958:xii; ibid.: 11–13; ibid.: 59; Haas 1964:96) or even explicitly (though partly referring to specific issues or regions: Haas 1964:50; ibid.: 77, 81, 82, 116, 117, 456, 487, 495) suggest that spill-over was not thought as an automatism in the narrow sense of this word. This anticipated some later intergovernmentalist and ‘new institutionalist’ arguments (see below). It was soon realised that this distinction between welfare issues as ‘low politics’ and ‘high politics’ where the vital interests of states were at stake was both subjective and fluid (e.g. W.Wallace 1977:303; see also Hoffmann 1982:29). Under these circumstances, the preconditions of a ‘problem-solving’ style of bargaining—i.e. the orientation towards common goals, values and norms— are difficult to create, thus the ‘bargaining’ style prevails: ‘The price to be paid is not simply a prevalence of distributive conflicts complicating all substantive decisions, but a systematic tendency towards sub-optimal substantive solutions.’ (Scharpf 1988:264). Scharpf draws the lesson from German history that ‘the first condition may imply the second one, and that unanimity will evolve even in the absence of formal requirements’ (Scharpf 1988:254). The neofunctionalists had, in Scharpf’s perception, not noticed that their approach ‘depended upon national governments not noticing—in effect—the gradual draining away of their lifeblood to Brussels’ (W.Wallace quoted in Scharpf 1988:266). In any case, it is beyond doubt that either of these ‘grand theories’ highlight one extreme on what may be perceived as a continuum between European integration viewed as a simple international organisation versus viewed as a to-be state. They concentrated their analyses on either the resilience of the states as central actors or on the supranational institutions and functional pressures as the key engines of the integration process. Bulmer pointed out the vital impact of domestic politics on the policy-making output of the EC (see Bulmer 1983 and 1985). Wessels states that ‘functional, political and territorial spillovers—as defined in a revised and updated version—are of major relevance’ (Wessels 1997:275). By contrast, H.Wallace and W.Wallace stress that ‘diffusion of governance may just as well be an outcome as fusion’ (H.Wallace 1996:15). W.Wallace (1996:440) perceives integration as the tension between the functional logics pressing for integration and the political logics (sovereignty, national identity) opposing it. Within the ‘syncretic approach’, it seems that once again different authors highlight different aspects of the same game. Private actors such as ‘local action groups and local businesses’ (Marks et al. 1996:369) and interest groups (Marks 1996:119) are mentioned but not attributed the same special importance as sub-national executives. In recent years, European integration research has increasingly incorporated insights—notably at the conceptual level—from neighbouring political science

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Notes fields (for overviews and a discussion of the relationship between concepts from various fields see Hix 1994; Rhodes and Mazey 1995; Hurrell and Menon 1996). It is a matter of disagreement how much is indeed new in ‘new institutionalism’. Some argue that the study of institutions had always remained part of the political science mainstream (e.g. R.A.W.Rhodes 1995:54 with further references). Hall and Taylor (1996) distinguish three forms of ‘new institutionalism’: rational choice institutionalism, historical institutionalism, and sociological institutionalism. Since their distinction between the latter two forms is not convincing (indeed, it seems a matter of degree rather than of principles), I prefer to use ‘historical institutionalism’ only. Other authors use the adjectives ‘culturalist’, ‘reflectivist’, ‘constructivist’ or ‘sociological (institutionalist)’ in order to indicate the same assumption, i.e. that institutions (of all kinds) may even affect the preferences and identities of political actors. The coherence of institutions, although admittedly varying, is considered ‘substantial enough to justify viewing a collectivity as acting coherently’ (March and Olsen 1989:18). In principle, the attribution of interests and intelligence to an institution is considered ‘neither more nor less problematic, a priori, than whether it makes sense to impute them to an individual’ (ibid.: 18). In the German, more law-oriented tradition of studying European integration, the important role of the EC institutions and notably the ECJ had never moved out of sight, also in political science. Pierson’s brief empirical section actually gives many examples from the field of social policy (Pierson 1996:148ff.). Also Pierson’s work with Stephan Leibfried on EC social policy points to the EC institutions as ‘autonomous sites of political authority’ (Pierson and Leibfried 1995a:10). Pierson explains that ‘evolving arrangements will diverge from the intentions of original designers, while any newly arriving Chief of Government is likely to find institutional and policy arrangements considerably out of synch with its own preferences’ (1996:140, emphasis added). He does, however, not study changes in preferences of the actual decision-makers. It seems that so far, the new institutionalist writers in the European integration field (including those who perceive themselves to be historical institutionalists such as Pierson 1996 and Bulmer 1994) are less close to ideational and constructivist approaches (see below) than the definition of historical institutionalism in the influential Thelen and Steinmo (1992) edited volume. Here, the question is less what material institutions (such as e.g. the EC Commission) or non-material institutions (such as the EC Treaty regime) do or cause as such but rather what happens to those participating in them: are there processes of joint learning and joint preference formation? The borderline between historical institutionalism and learning-oriented approaches is blurred. Again, this is only a renewed interest in a topic with a long tradition. The redefinition of preferences and processes of learning were important ingredients of Haas’ thinking about integration (see e.g. Haas 1964:81). Moravcsik actually acknowledges that under specific conditions, governments may ‘cut slack’, i.e. loosen the constraints imposed by domestic actors (see notably his 1994 piece ‘Why the European Community Strengthens the State’). Daniel Wincott (1995:601) rightly pointed to a weakness in Moravcsik’s work on ‘liberal intergovernmentalism’: where do the preferences of the national

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executives come from in those cases? To extend the concept to processes of joint preference formation at the EC level certainly offers a plausible supplement in that regard. It should be mentioned that in many respects, the debate on European integration and preference formation mirrors the International Relations debate dubbed ‘second image reversed’ (see the seminal article by Gourevitch 1978:911: ‘The international system is not only a consequence of domestic politics and structures but a cause of them’). Jutta Weldes presented an interesting approach to the social construction of ‘the national interest’, whose logic can also be applied to the Euro-level. The content of ‘the national interest’ is accordingly emerging out of a process of representation through which state officials and others ‘make sense of their international context. The “national interest”…is created as a meaningful object, out of shared meanings through which the world…is understood’ (Weldes 1996:277). Neofunctionalist thinkers had touched upon such issues under the labels of ‘elite socialization’ and ‘feelings of collective identity’ (e.g. Nye 1971:203). Lewis draws on recent work by constructivists who assume that social reality is constructed when individuals come in contact and interact (see e.g. Wendt 1994). Gehring (1995:9; see also Wind 1997:31) is certainly right that a second look at the latest state of EU studies reveals that much resembles the dispute between the rationalistic and the ‘reflectivist’ (or ‘constructivist’) branch of regime theory (on these notions see e.g. Jørgensen 1997b:3ff.). It is essential to mention that although ‘some constructivists are deconstructivists of the idea of empirical research itself’ because on their ontological assumptions, intersubjective empirical research makes no sense (Matlary 1997:203 emphasis added), this is not the stream of thought referred to above (for more detail of the various strands of constructivism and postmodernism see e.g. Hollinger 1994; Dietz 1996:255ff.). See also Deutsch et al. (1957:36) who talked about the development of ‘a sense of community’. In the words of Jacobsen (1995:283), there has lately been ‘much ado about ideas’. Seminal publications were notably Goldstein and Keohane 1993a and the special issue of International Organization on ‘epistemic communities’ edited by Peter Haas in 1992; for EU governance see Jørgensen 1997a. The current literature on ideational aspects in international politics is typically characterised by the suggestion that ‘ideas as well as interests have causal weight in explanations of human action’ (Goldstein and Keohane 1993b:4; emphasis in original). Yee suggests that a ‘limited accommodation might be possible’ (1996:100) if ‘behavioralists and institutionalists make the methodological adjustments needed to analyze intersubjective meanings and symbolic languages, while interpretivists and postmodernists amend their radical scepticism about non-political adjudication in order to analyze indeterminate causal effects’ (Yee 1996:103). For the most systematic and—on an abstract level—elaborated application of policy analysis to European integration see Schumann 1996. By calling the newly depicted features of democratic systems ‘neo’-corporatism, ‘liberal corporatism’ or ‘democratic corporatism’, scholars wanted to distinguish them from the fascist counterparts pre-dating the Second World War. After two decades of debate on contemporary corporatisms, the evocation of the spectre of fascism and authoritarian rule seems less probable, so I will use the term ‘corporatism’ without prefix. It should be mentioned that this is not the

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Notes place for an elaborate analysis of twenty years of academic debate—such a task needs at least a book of its own (see e.g. Williamson 1989; on various concepts of ‘corporatism’ within political science and industrial relations see also e.g. Lehmbruch 1982; Cawson 1986; Streeck 1994c). See the impressive reference bibliography in Schmitter 1974 which includes texts from 1800 up to 1950, and the rich pre-1974 literature cited in his text. For example, Andrew Shonfield in his Modern Capitalism (1965) described drastic modifications of the governmental agenda which led to changes in the relationship between interest associations and the public bureaucracy as ‘corporatist’ (as referred to in Schmitter 1974:29). Lehmbruch mentions older French, English and Nordic schools on ‘corporatism’ (Lehmbruch 1982:4 and fn. 1). Referring to the firm or company level, micro-corporatism became a common expression (Grant 1985a:4). Lehmbruch (1984:62) suggested that sectoral corporatism differed from corporatist concertation by involving only a single organised interest and by not acting with explicit regard to systemic requirements of the national economy. Andersen and Eliassen 1991, by sharp contrast, mentioned off-hand that they expected Euro-corporatism if the EP was significantly strengthened. Börzel (1997) presents a more complex systematisation of policy network approaches along the dimensions of quantitative network analysis versus qualitative network analysis; interest intermediation school versus governance school, and analytical versus theoretical approaches. These forms do, however, meld into each other in the literature, and the attribution of the status of ‘theory’ to either of them is critical (see also Börzel 1997:30). Under the additional premise that quantitative ‘network analysis’ may be seen as a completely different approach (it is in fact a sociological research methodology, see also below), it seems useful to rely on a simpler differentiation here. Because in fact, all policy network writers are concerned with interest intermediation, I prefer to speak of the network typology approach versus the network governance approach. By doing so, van Waarden accepts ending up with de facto definitions which are partly at odds with much of the existing literature. For example, van Waarden’s ‘corporatism’ is not only dependent on whether there is delegation of public authority, but also on the number of interest groups involved: if the network includes only one major societal group, van Waarden (1992) speaks about ‘(sector) corporatism’ (regardless of who is dominant), if there are ‘two major conflicting societal groups’ he talks about ‘state corporatism’ (if the state agency is dominant) or about ‘corporatist concertation’ (if interests are dominant); as soon as there are parties or parliamentary committees (or more than two interest groups) in the network, there is no ‘corporatism’ (but ‘parental relations’); ‘state corporatism’ appears under ‘delegation of public authority’ if ‘state agency dominant’ despite the fact that van Waarden explains in the text that the delegation of state authority is ‘severely restrained’ under state corporatism (ibid.: 48). Van Waarden’s (1992:47) distinctive criteria between ‘meso’ and macro corporatism is the number of interest groups involved. This builds on Lehmbruch (1984:62) who was, however, not followed by the mainstream of writers who accepted no conceptual difference between various levels of corporatism (see Williamson 1989:160). Controversial questions are e.g., are policy networks specifically informal phenomena (e.g. Kenis and Schneider 1991), or can there also be formalisation

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(e.g. Marin and Mayntz 1991b)? Do networks never operate outside powerdependency relations (e.g. Marin and Mayntz 1991b; Scharpf 1993b), or is there symmetric interdependence? Should policy networks be occupied with public policy-making only (e.g. Marin and Mayntz 1991b), or should common market strategies by firms be included (e.g. Kenis 1991)? 49 Among the numerous scholars who applied network images to European integration in a metaphorical way are Robert Keohane and Stanley Hoffmann. They stated that the EC was ‘best characterized as neither an international regime nor an emerging state but as a network involving the pooling of sovereignty’ (1990:10). Helen and William Wallace, in turn, view the EC as a ‘seamless web’ (e.g. H.Wallace 1996:11). In their volume Lobbying in the European Community, Sonia Mazey and Jeremy J.Richardson came to the conclusion that ‘there is at least a case to be made that the network concept is quite useful’ (Mazey and Richardson 1993b:253). 50 This is surprising at least in the case of neo-functionalism, whose scholars have explicitly stressed the important role of day-to-day policy-making for a deeper understanding of European integration (on neofunctionalism and intergovernmentalism see section 1.1.1). 51 Ironically, one might ask whether it is indeed satisfying to stick to models of slices of elephant limbs. Due to the fact that no decision-taking in the proper sense occurs in this early phase, Peterson’s approach is furthermore at odds with the concept of policy networks as used by most authors in order to refer to all relevant actors within one specific policy area (see also Börzel 1997:13). It seems doubtful whether such a restriction of the functional scope of a policy network actually constitutes an advancement. After all, it is not disputed that in the decision-shaping phase, central policy actors (such as the European Commission at the EU level) used to consult a rich variety of interest groups, governmental representatives, and experts. Quite obviously, a network metaphor is appropriate here. 52 Cf. e.g. Grande 1996a whose ‘paradox of weakness’ stresses that public actors can increase their autonomy vis-à-vis private interest groups as a consequence of their integration in systems of joint decision-making. 2 Social policy from Messina to Maastricht 53

This book applies a pragmatic notion of ‘social policy’ which includes those actions which fall under the so-called ‘social dimension of European integration’: any acts carried out under the social policy chapters or protocols of one of the Treaties establishing either a European Community or the Union; plus policies targeted at facilitating the freedom of movement of workers in the social realm; and last, but not least, action to harmonise social or labour law standards of the member states whatever the relevant Treaty basis might be. Most writers on EC social policy have chosen a similar approach (see e.g. Schulz 1996:5). 54 German original: Entscheidungslücke (author’s translation). 55 There were in fact three decisions on various aspects of the Defrenne case. For details see Hoskyns 1996; Falkner 1994a; Landau 1985. 56 Directive 75/117/EEC of 10 February 1975 on the approximation of the laws of the member states relating to the application of the principle of equal pay for men and women, OJ 75/L 45/19. 57 Directive 76/207/EEC of 9 February 1976 on the implementation of the

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67 68 69

70 71

72 73 74

Notes principle of equal treatment for men and women as regards access to employment, vocational training and promotion and working conditions, OJ 76/L 39/40. Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security, OJ 79/L 6/24. Directive 86/378/EEC of 24 July 1986, OJ 86/L 225/40. Directive 86/613/EEC of 11 December 1986, OJ 86/L 359/56. Directive 75/129/EEC of 17 February 1975, OJ 75/L 48/29. Directive 77/187/EEC of 14 February 1977, OJ 77/L 61/26. Directive 80/987/EEC of 20 October 1980, OJ 80/L 283/23. Directive 92/85/EEC of 19 October 1992, OJ 1992/L 348/1. Directive 94/33/EEC of 22 June 1994, OJ 94/L 216. Directive 96/71/EC of 16 December 1996, OJ 97/L 18/1. The Common Position in the Council was decided during the UK’s policy of non-co-operation because of the EC embargo on beef. The decision was taken by qualified majority (Europe, 3 June 1996: no. 14) and accepted by the EP without amendment on 18 September (Europe, 23 September 1996: no. 12). Directive 91/533/EEC of 14 October 1991, OJ 1991/L 288/32. Directive 93/104/EEC of 23 November 1993, OJ 93/L 307. Under the Social Agreement, two further Directives were adopted: the European Works Councils Directive and the Parental Leave Directive (see case studies, sections 4.1 and 4.2). It should, however, be mentioned that the Council only ‘took note’ of the action programme which came as a disappointment to the Commission which had suggested a rather pragmatic text because the EEC was, at the time of final adoption, already confronted with major internal and external difficulties (see Rifflet 1989:20). Clearly, there are diverse views and diverse self-interests concerning the desirability of social policy harmonisation within the Commission, notably between various Directorates General. Those actors who criticised the fact that the SEA had not introduced more far-reaching social policy competences and majority votes (mainly the EP and the ETUC) wanted to extensively use Article 118a, i.e. to go beyond the ‘working environment’ and to include working conditions. Such a ‘Treatybase game’ was possible because the wording of Article 118a of the EECT is all but unequivocal (see section 2.1.1 above). See the report by the EP’s Social Committee on the notion of working environment (PE 124.263/fin., 22 October 1988, rapporteur: Heinke Salisch) asked to include all direct and indirect material or psychological issues connected to employment, including length, organisation, and content of the duties. The EP invited the Commission to present, under Article 118a, a framework Directive on work organisation (including night, shift, part-time, and temporary work). This study (SEC[89] 926 final) resulted in huge differences between the labour law systems (role of legislation, social partners, and courts) and standards in the single member states (see overview on results in Social Europe, extra issue 4/92). This seems to have been one of the concessions made in vain to make the text agreeable to the UK. In legal terms, a formal extension of primary law is in any case impossible without an intergovernmental conference. In fact, the two ‘schools’ of social policy harmonisation known from the times of the Rome Treaty negotiations (see section 2.1.1) still oppose each other.

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They may be seen as ‘advocacy coalitions’ in the terminology of Sabatier (1993). 75 These statements are a requirement prior to the final decision by the relevant EC institutions (in the first place the Council), but they are in no way binding as to their content or direction (see Article 193, ECT). 76 Under the so-called co-operation procedure (Article 189c, ECT), the EP was given a greater role. The Council could no longer decide against its strict opposition to a measure. 77 In general, any measures proposed under the action programme (which the Council envisaged to be adopted under the EECT, explicitly including its Article 235) should take into consideration the wishes of the social partners (see the general considerations). 78 It was seen in close connection with an increased participation of the employees in the activities of the enterprises and plants. 79 The ETUI is now the research branch of ETUC, and represents a major support to the transnational union movement by the EC. 80 See Ross (1995a:150): ‘The Social Dialogue Ad hoc Group was a Delorist pet project…[For] Jean Degimbe, DG V’s Director General, social dialogue was the last passion of a long carreer.’ The former Head of the Directorate ‘Social Dialogue’ in the EC Commission, Carlo Savoini, is officially described as a ‘dogged defender of the European ideal and of the social dialogue’ (Social Europe, 2/1995:6). 81 The Commission had suggested a more far-reaching provision (see COM[89] 248 final): ‘relations based on agreement may be established between the two sides of industry at European level if they consider it desirable. The texts of the agreements thus concluded may cover employment and working conditions as well as related social entitlements. To this end, the dialogue between the two sides of industry at European level must be developed, in particular at inter-occupational and sectoral level.’ 3 Social policy in the Maastricht Treaty 82 At Maastricht, it was decided to change the name of the ‘European Economic Community’ to ‘European Community’. The EEC Treaty (whose contents were at the same time reformed) has since been called the EC Treaty (Treaty establishing the European Community). 83 Cf. her report to the Committee on Social Affairs, Employment and the Working Environment of the EP (Report DEC EN/CM/202155). Immediately after the Maastricht Summit (and before the above-mentioned expertise was published), even some Commission and UNICE officials thought that the eleven-only provisions might not have any legal effect (interviews, January 1992). 84 ‘The European Council noted with approval the agreement of the Intergovernmental Conference to incorporate…the Social Agreement…in the Treaty. The Council should seek to make the relevant provisions of this title immediately effective.’ (Presidency conclusions, Amsterdam European Council, SN 150/97:10) 85 The UK was furthermore not bound by any specific financial consequences from Acts adopted under the Agreement. Only in July 1996, however, a technical solution was agreed which provided for certain actions (e.g., training of workers and employers’ representatives and the promotion of international meetings of

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86 87

88 89 90

91

92 93

94 95 96 97 98 99 100 101

Notes their representatives) to be financed without the UK contributing to the costs. The EP only reluctantly accepted that against the principle of budgetary universality, a revenue chapter was earmarked for the funding of specific social actions (Europe, 24 July 1996: no. 19). It seems that these provisions were never actually employed: the relevant budgetary lines remained empty. A single legal basis for EC social policy will only be re-established after the implementation of the 1997 Amsterdam Treaty, most likely by 1999. These matters can nevertheless be the subject of an autonomous social partner agreement (see also Bercusson 1995:178). From a legal viewpoint, they may even be the subject of EC law under different legal bases (e.g. Articles 100 or 235, ECT). The Commission and the social partners may jointly decide to extend this period (Article 3.4, Social Agreement). The Council acts by qualified majority, except where the agreement in question contains one or more provisions relating to one of the areas which needs unanimous decision-taking (Article 4.2, Social Agreement). In such cases, the member state must ‘ensure that, no later than the date on which a directive must be transposed…, management and labour have introduced the necessary measures by agreement, the Member State concerned being required to take any necessary measure enabling it at any time to be in a position to guarantee the results imposed by that directive’ (Article 2.4.2, Social Agreement). Indeed, the post-Maastricht EC social policy procedures fit Schmitter’s classic formula for corporatist concertation, i.e. ‘a mode of policy formation in which formally designated interest associations are incorporated within the process of authoritative decision-making and implementation’ (Schmitter 1981:295). Buda (1995:289) speaks of ‘horizontal’ subsidiarity with a view to the social partners. Schulz (1996:79), a member of the German delegation for social policy to the IGC, states that social policy was ‘one of the main points of the conference’ (author’s translation). See also Europe (11 December 1991:3 and 13 December 1991:3). This proposal is not published but the author has a copy available (for a general outline of it see Europe, 7 February 1991, Vanhoonacker 1992:43). French original: ‘conventions collectives de travail’ (point I.1.) To back this idea, the Belgian government referred to existing national practices, notably in Belgium where the King can make obligatory the collective agreements concluded by the social partners in the national Labour Committee. The Belgian proposal thus already included the preference for action by the social partners over action by the Council which was finally introduced in the Social Agreement. The Commission published this text to a restricted public in a large edition including all its proposals to the IGC of spring 1991 (SEC[91] 500: see 77ff.). The Commission furthermore proposed to include into the social chapter the provision that EC regulation might charge the social partners in the member states to implement EC social regulation. This is even confirmed in the social partners’ proposals on the implementation of the Social Agreement (29 October 1993; published in Social Europe, 3/ 1994:282). It is interesting to note that the Commission later pushed through this aspect

Notes

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103 104

105

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in day-to-day social policy making, although it was not adopted by the IGC (see Chapter 5). In doing so, the Commission followed the wish of UNICE, CEEP and ETUC as expressed in their proposal on the implementation of the Social Agreement (29 October 1993; published in Social Europe, 3/1994:282). Slightly reformulated was the provision that member states are required ‘to take any necessary measure enabling it at any time to be in a position to guarantee the results imposed by the Directive’ in case of implementation by the social partners (proposed Article 118.3, sentence 2). Implementation of agreements via Commission recommendation was not envisaged, and no Commission initiation was needed for negotiations between the social partners. Following a meeting of the Foreign Ministers in the frame of the IGC on 12– 13 November 1991, the Dutch Presidency suggested the inclusion of a declaration in the final act of the IGC (which was in the end accepted tel quel): the application of European collective agreements according to member state rules should not imply an obligation on the member states to apply them directly, to work out rules for their transposition, or to amend national legislation to facilitate their implementation (published in Europe, Europe Document no. 1746–7 of 20 November 1991). Added were only the words ‘on the content’ to the provisions of the second round of consultations, as earlier in the social partner proposal.

4 Policy-making under the Social Protocol 106 The way in which employees were to be represented was based on existing employee representatives under national law or practice. By empowering managements of subsidiaries to give employee representatives the necessary information, too, the Directive aimed at preserving national practices and representative bodies. But the establishment of a body representing all employees of a transnational enterprise was mentioned as a possibility (see Article 8.3). 107 In 1983, the Commission reacted to criticism within the Council by introducing some amendments to its draft (OJ 1983/C 217/3). Information was now deemed necessary only on decisions taken by the mother enterprise, no longer on decisions by the local subsidiary. The size of ‘eligible’ enterprises of subsidiaries was raised to at least 1000 within the Community (instead of 100 in the subsidiary to be informed). Furthermore, the range of necessary information was limited and the possibility for employee representatives to get information directly from the parent management in case of the subsidiary’s inability to inform was dropped. On the other hand, subsidiaries of extra-EC transnationals were included in the scope of the Directive (see Article 2). 108 Established by the Commission in the context of a meeting of UNICE, ETUC and CEEP on 12 November 1985. 109 UNICE, ETUC and CEEP nevertheless agreed on the positive economic and social effects of information and consultation systems and called for their full exploitation at the national level (ibid.: 43). 110 This distinguishes the European Works Councils Directive from other much debated issues of prospective EC social policy (such as e.g. parental leave and even the posting of workers), where the single member states may at least technically regulate independently (however, with possible adverse effects on their competitiveness, as outlined in section 2.1.3).

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111 Milner even assumes a ‘partnership between policy-makers and a number of large Europe-based multinationals’ (1995:6). 112 In its Opinion on ‘Social Consequences of Cross-Frontier Concentrations between Undertakings’ (18 October 1989), the ECOSOC called for an EC framework to provide for regular information and consultation of employees’ representatives at the European level in transnational enterprises. 113 This has been seen as a possible source of discrimination against employees in purely national enterprises (Bersch 1991:27). 114 Ireland, Greece—and the UK—wanted to raise the threshold to at least 250 workers in two member states (Commission proposal: 100). 115 This exclusion was called for by Denmark and Greece. 116 Cf. Stephen (1995:25): ‘the co-operation procedure was designed to give power to [transnational] actors where spillover occurred’. 117 On that occasion, he reiterated the Commission view that the objective of the Directive was to improve the competitive position of industry by ensuring that employees were informed, consulted, and felt a real sense of participation in the life of their companies (Europe, 2 December 1993:12). 118 That is, the ‘representative’ organisations mentioned in the Commission’s Communication on the Application of the Social Agreement (COM[93] 600 final, 14 December 1993; see section 5.3). 119 An appeal was launched to the Commission, Council and ETUC ‘not to impose a centralised worker information-consultation system’ (Europe, 11 February 1994:15). This referred to the minimum conditions for the case of failure of enterprise-level negotiations on the model of consultation contained in an annexe to the Commission proposal. In addition to UNICE, also smaller employer associations remained critical. Eurocommerce (an association representing retail trade) criticised the imposition of a ‘central structure’ which would necessarily make the contents of the information very general. It pledged to provide information at the local level and not to have worker representatives travel to another country: ‘This solution would reduce competition between European companies and impose a bureaucratic structure’ as well as high costs (Europe, 12 February 1994:14). Amcham—the EC Committee of the American Chamber of Commerce in Belgium—argued in the same direction (Europe, 8 February 1994:15). 120 The 1991 Agreement was a joint input of the social partners in an ongoing constitution-building process and cannot be considered as classical collective bargaining although it did represent a significant development. 121 European employers (UNICE and CEEP) after two exploratory meetings between the social partners handed over to the Secretary-General of the ETUC, Gabaglio, a document outlining their official offer to negotiate (Europe, 16 March 1994:15). The two organisations therein confirmed to ‘1) accept that appropriate arrangements should be introduced to inform and consult employees in multinational companies about transnational issues of importance to them; 2) agree to open negotiations about the contents of an agreement which would meet the requirements of both the companies and the employees concerned; 3) recognise the need for the negotiating parties to adopt a flexible approach and to examine alternative methods and procedures’ (cited by Europe, 16 March 1994:15). 122 The employers’ offer was considered insufficient in substance. The ETUC presented a proposal for a text of pre-agreement, geared to three essential conditions: 1) the right to information for workers in transnational companies

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124

125

126

127

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must be clearly recognised; 2) the central management of a transnational company must, with a delegation of workers from subsidiaries concerned, negotiate the possibility of establishing either transnational representation of workers or equivalent procedures; 3) in the event of failure in negotiations or in the case of refusal on the part of the central management to negotiate, minimum provisions should have immediate application (Europe, 19 March 1994:14). UNICE Secretary-General Tyszkiewicz called ETUC’s step a pure pretext— arguing that an agreement would in any case have been subject to a later legislative act by the Council which had (due to the Social Protocol) excluded Britain. It was assumed that the true reason for the failure of the negotiations was the hostile stance towards an agreement by both German and Nordic workers unions, who thought that their ambitions would be followed by EC legislation anyway (Hornung-Draus 1994:4). Furthermore, it was claimed that the TUC tried to ‘take hostage’ its national counterpart the CBI by forcing it to implement any Euro-level agreement in case this were not implemented by the British government (ibid.). For example, no minimum provisions applied at all concerning negotiated methods of information and consultation or concerning a negotiated form of the ‘European committee’. No specific system or body of employee information and consultation was determined. Subsidiary minimum provisions were to be binding only if the central management refused to negotiate for at least six months, if within two years (instead of one) the negotiations had no result, or if management and labour agreed on it. Furthermore, no subsidiary provisions applied if the Special Negotiating Body decided with a two-thirds majority that negotiations with central management should not be conducted or should be ended. In such a case, no further negotiations could be triggered for two years. Article 13 provided that the obligations of the Directives would not apply to companies or groups which already had an agreement covering the entire workforce and provided for transnational information and consultation of employees. The parties could even jointly decide to renew such arrangements in case they expired (without any deadline being mentioned). The same is true for ECOSOC, whose position on the Commission draft was adopted at its plenary session of 1–2 June 1994 in a majority vote (90 votes in favour, 50 against, 12 abstentions). A counter-opinion by the employers’ group was rejected. In approving the draft, the Committee suggested a number of amendments, including: an increase in the majority on the Special Negotiating Body required to prevent or halt negotiations with management, from 66 per cent to 75%; and a reduction in negotiation time for the Special Negotiating Body to one year only (EIRR 246:3). It seems noteworthy that a modus of formalised ‘quasi-unanimity’ had already been debated prior to the SEA. If only one or two Council members were against a measure, they should abstain to allow unanimous decision-taking. The interim report of the reflection group preparing the IGC 1996 mentioned a similar modus of ‘constructive abstention’ as a matter of discussion. It was, however, not followed up in the Amsterdam Treaty, except for the Common Foreign and Security Policy. With the benefit of hindsight, this was confirmed for neither the European (where collective negotiations were subsequently successfully completed) nor for the enterprise level. Even the UNICE Secretary-General meanwhile stated that ‘the Directive will not do any particular harm’ (Europe, 17 July 1995:11).

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128 The member states have e.g. to adopt in their legislation subsidiary requirements and lay down budgetary rules regarding the operation of the European Works Councils. 129 Possible derogations are even more far-reaching than in the preceding Working Time Directive (93/104/EC), where agreements between the social partners at all levels had already been given a great deal of attention (see Bercusson 1995:163ff.). 130 A similar regulatory pattern of ‘cascades’ falling from the macro via the meso to the micro level had already been introduced by the Working Time Directive (not adopted under the Social Agreement but after the latter had entered into force). 131 In principle, the text submitted to the so-called social partners should in the case of their failure to negotiate a collective agreement have been the one submitted to the Council. In none the less altering its formal proposal, the Commission may be seen as having defended its traditional monopoly of initiative. 132 To specialists this comes as no surprise: ‘social integration has proven to be anything but spontaneous’ (M.Rhodes 1995a:3). 133 It particularly stressed that the terms under discussion were wider than the issue of time off for workers with children. 134 European Regional Organisation of the International Federation of Commercial, Clerical, Professional and Technical Employees, an ETUCaffiliated European Industry Committee (see EIRR 246:31). 135 In the 1996–97 negotiations on part-time work, the ratio of women was as high (interview with Jean Lapeyre, head of ETUC delegation). 136 In vain, the British Trades Union Congress (TUC) called on its employers’ counterpart the CBI to negotiate on a voluntary implementation of the Euroframework agreement (see EIRR 263:3). 137 There was unanimous agreement. Adoption was, however, postponed with a view to parliamentary approval in Germany (Europe, 30 March 1996:7). 138 It therefore seems that already one day (or even one hour) of time off would suffice to comply with the Agreement, as far as force majeure is concerned. 139 Article 2.2 of the Social Agreement provides that social policy ‘directives shall avoid imposing administrative, financial and legal constraints in a way which would hold back the creation and development of small and medium-sized undertakings’. 140 If the Commission did not submit an agreement to the Council, it would immediately inform the signatories of the reasons therefore (COM[93] 600 final, 14 December 1993: see pt 39). 141 Reportedly, the Commission had asked for a legal opinion by this Council service (see Hiller 1997:27 with further references). 142 The Directive itself is indeed an extremely brief text. After a long series of 24 general considerations, its contains only three articles. They explain that the annexed framework Agreement ‘is made obligatory’ (article 1), they repeat some of the procedural aspects (e.g. implementation until two years after adoption, three years if via the social partners; article 2), and state that the member states are the addressees of the Directive. The most interesting aspect is in fact the very first introduction of a non-discrimination clause relating to race, sexual orientation, colour, religion, and nationality (Article 2.5), such as provided for in the Council Resolution on racism and xenophobia (OJ 95/C 296/05). 143 It seems that the relevant employer federation EuroCommerce wanted to demonstrate its general enthusiasm to participate in collective negotiations

Notes

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147

148 149 150

151 152

153 154 155 156

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rather than strike a particular deal, especially when no lower standards than in the Directive were available. ‘[F]or the time being and because such is the employers’ wish, the scope of this sphere is determined by Community legislative initiative’ (Lapeyre 1996:121). He served in the parental leave as well as in the part-time negotiations (information given to the author by several participants to the negotiations). If the conventional route fails (as happened concerning the European Works Councils), however, the Parliamentarians will be less marginal after the Amsterdam Treaty comes into force: the latter introduced the co-decision procedure for those issues of EC social policy which are not decided by the social partners nor under a unanimity requirement (if the latter applies, the EP will only be consulted). A plant in Vilvoorde (Belgium) was shut down in order to profit from cheaper labour and higher subsidies in Spain (see e.g. Europe, 3 March 1997: no. 34). This provoked renewed controversies on the role of labour costs (and subsidies) in the Internal Market, and prompted ETUC support for simultaneous protest actions and strikes in Belgium, France and Spain. This may be considered a new quality of European trade union activism. ‘Tout le monde s’est rendu compte que le déséquilibre entre l’Europe économique et sociale risquait de déboucher sur une véritable catastrophe’ (quoted in Notabene, 1997/100:12). In the 1974 Social Action Programme, the Commission had already mentioned that the protection of temporary work via agencies should be improved (OJ 74/C 13/1). For an overview on the legal bases see Table 2.1. It is interesting to note that the EP chose a strategy of conflict in order to protest against the legal basis of Article 100 of the ECT (requiring unanimity) for the proposed Directive on working conditions. It asked the Commission to withdraw this text and to insert the material contents into the two other drafts which were suitable for majority voting (see OJ 90/C 324/1). Specific standards proposed by the Commission are outlined in Table 4.8. The UK government considered the Commission’s proposals ‘costly, unnecessary and counter-productive, because they will harm the interests of the very people they seek to protect. Jobs will be lost throughout the Community and employers in the Community will face restrictions on their ability to organise and to afford the flexible working patterns they and their employees need… whilst competing with business in countries such as the USA and Japan, which do not have similar restrictions’ (Employment Department ‘Fact Pack’, December 1991). Other governments (e.g. the German) shared British criticism concerning the legal bases of the proposals. ‘Les coûts salariaux sont un facteur normal de concurrence’ (position paper, 30 August 1990: pt 6). Commissioner Flynn stated that new proposals might re-divide the issues of part-time and fixed-term employment and be more stringent than the German compromise draft (EIRR 252:2). The Commission had in fact already announced on 30 May 1995 that it would start such consultations by early September 1995 (Europe, 31 May 1995:9). While 22 answers are mentioned under point 2 of the second consultation document of the Commission, only 21 are shown in Annexe 1 which provides more details.

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157 Some organisations asked for minor extensions which were accepted (second consultation document of the Commission, point 3). The end of the first consultation period was mid-December 1995 (see EuroAS, 1/1996:4). 158 The Council’s July 1994 Recommendation on the broad guidelines of the economic policies of the member states and the Community, in turn, recommended dismantling obstacles to more flexible working time (see Europe, Documents No. 1892, Europe, 14 July 1994). 159 The ETUC actually felt that only by then, the employers had decided to want to negotiate an agreement (interview with a trade union negotiator). 160 ETUC successfully urged reference to the applicable collective agreement and national practices if no comparable worker is available in the same establishment. 161 For implementation the social partners suggested to the Commission a period of two years, in cases of particular difficulties to be extended to three years, after Council deliberation. 162 Most recent Eurostat data (see Europe, 20 September 1997: no. 30) account for 16 per cent of employed people in the EC working part-time. 163 It seems, however, that at least the employers feel that this is at best a mediumterm perspective because for the moment, they see much work to do in the existing agreement (translation, implementation, etc.; interview with UNICE official). The ETUC, in turn, hopes that further negotiations on fixed-term work and on telework might be announced in autumn 1997 and started before the end of the year. 164 There is no definition of casual work in the agreement. According to Commission sources, the interpretation might happen according to national provisions. In a prospective law suit, the ECJ might also refer to the Council Directive 91/533/EC on a written work contract, where atypical work to be excluded from the scope was defined as ‘work with a total duration not exceeding one month, and/or with a work week not exceeding eight hours’ (Article 1.2.a). This Directive, however, allows furthermore exclusion of work of a ‘casual and/or specific nature provided, in these cases, that its nonapplicability is justified by objective considerations’ (Article 1.2.b). 165 Reportedly, details of when this might be appropriate were not discussed (interview with UNICE official). 166 Those who earn less than 580 DM (West) or 470 DM (East) are excluded from the statutory pension system and from unemployment assurance, and those working less than 17 hours per week are also excluded from the statutory pension system. 167 According to ECJ jurisprudence related to the issue of sexual non-discrimination at work, it has for a long time been obligatory not to discriminate against parttime workers for reasons of sex. This includes the issue of employment-related schemes of social security which fall under the definition of pay under Article 119 of the ECT (see the Barber case C-262/88, decided 17 May 1990). It is true that these provisions would not have covered cases outside gender-related non-discrimination (i.e. if only male or only female workers are relevant). Because part-time work is de facto a ‘women’s issue’, the extension of the personal scope of the non-discrimination principle is, however, rather negligible in dayto-day life. According to ETUC sources, the Part-Time Agreement does in any case not exceed existing case law in EC equality policy. 168 Representatives of all concerned parties and the Commission agreed in

Notes

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170 171

172

173

174 175 176 177 178

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interviews with the author that the ECJ is of increasing de facto importance under the post-Maastricht social policy patterns. That the summit furthermore called management and labour ‘to bear in mind in their discussions the need to strike a balance between labour market adaptability and social security, in order to enhance employability’ (ibid.) may be interpreted as an answer to the (although weak) call on the governments to adapt social security with a view to the equal treatment of part-timers. In the Parental Leave Agreement, clause IV.3 had only referred to the possibility of further Euro-level negotiations, in general. Clauses 2.2 and 4.4 state that ‘Member States, after consultation with the Social Partners in accordance with national law, collective agreements or practice, and/or the Social Partners…may’ exclude work on a casual basis to make access to particular conditions of employment subject to qualifications. This industrial relations aspect had been promoted by the ETUC. It might be seen to interfere with national political cultures if the contrary were not explicitly stated (what makes the provision quite ambiguous). Some 32 per cent of female but only 5 per cent of male employees are parttimers (see Eurostat data, see Europe, 20 September 1997: no. 30). It should be mentioned that some aspects which would have been of central interest from a working mother’s point of view were unsuccessfully put forward by the ETUC (e.g. the inclusion of the organisation of work in those potential obstacles to part-time work to be periodically reviewed). It was, however, by no means obvious that a Council Directive instead of an agreement might have performed better with a view to improving the rights of (especially female) part-timers. Reportedly, there were many women among the labour negotiators on parttime work. However, they represented their national or sectoral organisation, while the ETUC Women’s Committee which represents women’s interests as such had only one seat. UNICE/CEEP clearly hope for restrictive interpretation by the ECJ, while the ETUC expects the contrary. ‘Il s’agit d’un apprentissage progressif de la négotiation dans un cadre plurinational’ (Jo Walgrave quoted in Notabene, 100/1997:12). ‘[C]ertains gouvernements considéraient, lors de l’accord sur le congé parental, que le ton impératif n’était pas approprié.’ (Jo Walgrave quoted in Notabene, 1997/100:12). Not before 16 months after the failure of the talks on Euro-Works Councils, the Commission would open another round of second consultations under the Social Agreement. It is interesting to note that in this case, there was no time to consult the social partners as extensively as provided for under the innovative post-Maastricht social policy regime. Besides the disputed protection of workers’ rights through minimum social standards, the resolution set out already well-known EC social policy objectives: improving competitiveness and increasing the chances of job-creating growth; respecting the principles of subsidiarity and proportionality; aiming at convergence of systems rather than making them uniform; reinforcing the social dialogue; and agreeing social and economic actions among the member states. However, it was clear from the outset that the employers did not want to negotiate on sexual harassment (see below). From a feminist standpoint, it seems furthermore relevant to consider that

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sexual harassment and the burden of proof in sex discrimination cases are predominantly of interest for women—much more exclusively so than atypical work and parental leave. It is well known as a structural feature of corporatism at the national level that women’s interests tend to be neglected. There is little reason to expect a corporatist policy community at the EC level to perform fundamentally different in that regard. 181 For example, Platzer (1997:196) sees the Directive ‘despite trade union criticism of the detail…[as] an example of a well-balanced mixture of subsidiarity,… proportionality,…and flexibility’. 182 Bercusson (1995:157) has rightly pointed out that ‘[t]he principle of collective negotiation of labour law introduced by the Protocol and Agreement on Social Policy may be seen as the founding constitutional basis for the collective labour law of the European Union’. 183 Such studies might add another criterion for the evaluation of any such regulative style: in addition to community and autonomy, the social justice (or equality) component should be taken into consideration when analysing each piece of EC social law in turn. 5 The evolution of social interest intermediation 184 The European Industry Committees are organisations of trade unions within one or more public or private economic sectors (for an excellent overview on their historical development see Stöckl 1986). The ETUC favours the creation and development of industry committees within all spheres of economic and social activity (see ETUC Constitution, Article 4). Nevertheless, these sectoral liaisons between unions in Europe are considered ‘weak and underresourced, and ridden with internal differences in organisation, policy, and ideology’ (Visser 1997:21; for an overview on all European industry federations see Keller 1997:21). 185 That the ETUC since consists of national trade union confederations and European Industry Committees on equal terms is an important improvement to the problem of co-ordinating territorial and functional labour interests at the Euro-level. Both are now directly represented under the umbrella of the ETUC, and the (so far eight) Industry Committees have even overproportional weight in the qualified majority votes. 186 Its focus was ‘on the issues of employment and solidarity in Europe and on the need to develop a strong, democratic and open Europe of solidarity’ (Europe, 10 May 1995:11). 187 Nevertheless, Ross reports serious internal ‘controversy over the ETUC’s bargaining role [where] the Secretariat had to settle for less than it initially desired’ (Ross 1997:14; see also Dølvik 1997:41ff.). 188 The Metallarbeiterbund, by contrast, was not against. This sectoral federation is considered to have more weight within the ETUC than the DGB. It seems that the DGB voted against both the parental leave and the part-time deal not only because of the rather low standards but also as a matter of principle, a protest against shifting influence to the Euro-level (interview with Commission officials). 189 Gorges (1996:51) counts more than twenty horizontal business interest associations at the EC level, and more than 300 sectoral ones. For a comprehensive overview on the multitude of business associations see e.g. Lanzalaco 1992; Greenwood 1997.

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190 This was agreed in an unpublished letter of the CBI to UNICE of April 1994 (confirmed to the author by both UNICE and the CBI). The ETUC accepted this special status of the CBI. 191 One should, however, not underestimate in practical life the effects of political pressure by a majority which makes it very hard for single delegations to indeed uphold a veto. 192 The Secretary-General of Eurochambres, Friedrich, openly stated what is usually only hinted in the Brussels in-group: CEEP is regarded as an appendix of UNICE in the social dialogue (Friedrich 1995:366). 193 The EC-level representation of small and medium-sized enterprises is very fragmented. In addition to UEAPME, there are also the European Committee for Small and Medium-sized Independent Companies (EUROPMI; the Brussels office was recently merged with UEAPME, see Notabene, 98:15), the European Confederation of Independents (CEDI), the European Medium and Small Business Union (EMSU), the European Union of Small and Medium-sized Companies (UEM), and various direct-membership-based associations such as the Committee for Small and Medium Commercial Enterprises in the Countries of the EEC (CPMECEE). Therefore, the Commission is reportedly working on the creation of an small and mediumsized enterprise ‘forum’ (see Greenwood 1997:119 with further references). 194 On the labour side, the European Confederation of Independent Trade Unions (CESI) wants to be included in the EC social dialogue (in the wider sense) as an intersectoral and interprofessional union federation. Primarily, however, this organisation organises workers in public services (Greenwood 1997:164). More chance of being included on the union side of the negotiation table, at least on an expert basis, has the CEC (Conféderation Européenne des Cadres). It represents managerial staff (see e.g. Greenwood 1997:135ff.). 195 Commission sources indicate that there was an attempt by the Belgian government right after the Maastricht Summit to specify the conditions of application of the corporatist procedures which were, however, not followed up. Even within the Commission, there are diverging interests with regard to this matter. While the social dialogue unit substantially gained in weight because of the new post-Maastricht rules, the labour law unit sees its competences disappearing as everything can now potentially be regulated by the social partners. 196 It was already referred to Delors and some of his major collaborators (Degimbe, Savoini, etc.; see section 2.2.1) in this context (see also section 5.4). 197 The interviewee himself had previously served in two French Ministries and in the Commission. It should also be mentioned that it is by no means unusual to job-hop from representing a member state (e.g. in a permanent representation) into the Commission (this was actually the case during the period of writing this study for two social policy experts among the interviewees). 198 For example, Norway and Iceland had then to jointly nominate a representative. 199 In the negotiations on atypical work, the three participants for UNICE were the porte-parole from the Irish employers federation, plus representatives of the important German employer organisation Bund Deutscher Arbeitgeber and from a Danish member organisation. For labour, representatives of the major Dutch and Belgian member organisations supported the head of the delegation from the Brussels central office. ETUC President Verzetnitsch recently stressed that, after all, the responsible and decisive group of negotiators consisted of three labour representatives only (Verzetnitsch 1997:22).

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200 In the second negotiations, on atypical work, the UNICE Brussels people would co-ordinate and translate. 201 CEEP was in fact not set up to represent management interests as such, but to represent at the European level specific producer interests of public enterprises. 202 It should be mentioned that also in national systems which are described as corporatist, there may be a plurality of organisations representing either side of industry (e.g. in Austria, there is a multitude of employer associations). The important criterion for corporatist patterns seems to be that among the top associations which are included in this sort of political exchange, there is no direct competition. In the Austrian social partnership, for example, labour is represented by both the chamber of labour and the Austrian union federation ÖGB. They are, however, non-competitive because the former features compulsory membership. In any case, Schmitter himself stressed that it was unrealistic to expect that any system in real life would fully comply with the characteristics of the ideal-typical corporatist group set-up (see e.g. Schmitter 1974:14). 203 That UNICE focuses on labour relations and non-sector-specific issues may, however, be seen as a successful externalisation of inter- and intrasectoral conflicts (see Lanzalaco 1995:266). This view is shared by Gorges (1996:64ff.) who reports that UNICE has somewhat improved its links with the multitude of sectoral business associations but that this resulted in information exchange only. 204 Lanzalaco (1995:263) mentions that, in fact, UNICE is already strengthening its ties with the employers in East European countries. 205 According to Commission sources, UEAPME has refused to be represented under such conditions. According to UNICE sources, UEAPME was not invited because small and medium-sized enterprises are not a ‘sectoral’ interest. The information exchange organised by UNICE with the other cross-sectoral business interests in the so-called ‘Employers’ Liaison Committee’ is purely voluntary and was also considered insufficient by UEAPME (on this committee see e.g. Gorges 1996:66). 206 According to the Commission, the major result of the study is that the national procedures are so diverse that none of them could be adopted as a uniform model for the EC level (pt 23). Furthermore, the Commission acknowledged that the development of social partner relations in the member states had taken such a long time that it was illusionary to want to create a European system overnight, by decree (ibid.). 207 If necessary, the Commission also announced it would consult the European Industry Committees within ETUC and the ‘respective sectoral units of UNICE’ (Annexe I, fn. 1). 208 This was again announced in the 1996 Communication concerning the development of the social dialogue (COM[96] 448: pt 64). 209 It is interesting to note that even UNICE, CEEP and ETUC themselves did not ask to be formally designated as the sole cross-sectoral negotiators. In their joint ‘proposals by the social partners for implementation of the Agreement annexed to the protocol on social policy of the Treaty on European Union’ (dated 20 October 1993), they state that ‘[t]he questions raised by article 4 of the Agreement are complex. Practice will clear up most of them.’ Under the heading ‘negotiations’, they talk about groups ‘mutually recognising each other as social partners and with an ad hoc mandate from their members’ (pt 10, emphasis added). 210 In its April 1994 report co-ordinated by Viviane Reding, the EP criticised the

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213 214 215 216 217

218

219

220 221

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Commission’s approach (PE 207.928). The EP demanded that the list of organisations should be reviewed and that a contact network for all interested groups should be set up with support from the Commission. It seems furthermore to have been a hope that public attention and pressure from some politicians would prompt the (formal or informal) inclusion of the contending smaller groups in the negotiations without formal intervention by the Commission (as indeed already happened in the atypical works case for three sectoral groups). It seems that affiliates of the smaller business associations (notably of EuroCommerce) who frequently are also members of UNICE rejected any step which might endanger the agreement (interviews with group representatives, 1995 and 1996). That this would also be the case with the part-time work agreement was indicated by the warm welcome to the agreement by the 1997 Amsterdam summit (see section 4.3). The details of the UEAPME legal complaint are kept secret. Officials of various interest groups and the Commission unofficially expressed the belief that the UEAPME would lose this case (interviews, July 1997). The EP advocates an opening up of the collective negotiations (see Reding report PE 209.928 of April 1994; interview with Viviane Reding, July 1996). Several interview partners expressed the opinion that the president of UEAPME might indeed long for his personal participation. Indeed, there was no single state theory being accepted by the various writers on corporatism in the 1970s and 1980s, which may be viewed as a major weakness (thanks to Wyn Grant for drawing my attention to this; see also Greenwood et al. 1992b:5). It is crucial to stress that the Commission cannot be viewed as a unitary actor. Its sub-divisions (Directorate Generals (DGs)), Directorates and Units have often divergent interests. Especially with a view to the social dimension of European integration, and to the social dialogue (in the wide sense), there are opposing views and self-interests to be noted. Relevant actors in the Commission felt rightly convinced from the outset that if sufficient incentives were given by the bureaucrats and politicians, the major interest groups would join in a co-operative mode of public-private governance. Senior members of DG V feel they have been engaged in such a process, on their part, for decades already—and that by now ‘il faut mettre ensemble le fil’, to build on earlier experiences and incentives set out at various levels (interprofessional, sectoral, national) to make corporatist patterns work. And the Council may only implement a collective agreement on a proposal by the Commission. UNICE observes that the Commission sometimes backs the unions’ wish for binding EC level intervention (e.g. in the Works Councils case and in the consultation document on national level information and consultation; interview with UNICE official, July 1997). It should also be mentioned that at least in the early practice of the Social Agreement, the political climate in the Council was an important aspect of the social partner negotiations. If the necessary majority of Council members seems willing to adopt social law, UNICE will be comparatively more interested in collective negotiations. Reportedly, this idea was developed by the former Head of the Directorate

228

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227 228 229 230

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Notes ‘Social Dialogue’ in the EC Commission, Carlo Savoini (interview with Commission official, May 1995). But see Greenwood (1997:108) who conceives of the Social Protocol as resembling ‘a limited form of private interest government’. Labour’s major class-specific organisational requirement is recruiting members (i.e. ‘associability’; Traxler 1990:49), and industry’s is obtaining the members’ conformity (i.e. ‘internal governability; ibid.). There are manifold indicators that the EC institutions have no intention of lessening their influence within the EC social policy community. For example, the Commission has announced it would issue another Communication on the application of the Social Agreement and would reconsider in the light of latest developments the representativeness of the organisations involved in the first round of consultations. This is, according to Commission sources, a most difficult and politically sensitive task. Therefore, it is intended to yet again produce a list which is not exhaustive but allows the Commission to take account of evolution. By July 1997, a contract was expected to be given soon to an agency in order to have a professional study starting by autumn 1997. Results are, however, only to be expected by the end of 1998 (interview with Commission official responsible). There is, however, no space here to fully survey the relevant literature of this neighbouring discipline of political science. Sometimes actually expressed in non-verbal gestures which were deliberately not suitable to be used as prospective ‘quotes’. Policy networks are seen as a response to the growing dispersion among public and private actors of resources and capacities for political action (see section 1.2.2). Although corporatist patterns were in principle seen as a consensus-creating and therefore stabilising mode of governance in capitalist economies, it was soon obvious that there were diverse national and, within that, sectoral patterns. The evolutionary tendency of a purely functional perspective was therefore qualified. Technical, institutional and cultural differences were held responsible for variations at the ‘meso-level’. Lehmbruch (1996:742ff. with further references) suggests distinguishing between technical sectors which should show empirically convergent patterns in the cross-national comparison because technology and market forces should work alike in all systems. By contrast, institutionally constituted sectors (such as e.g. social policy) are shaped by institutional and normative environments which may differ from system to system. From this one may draw the conclusion that in the second sort of sectors (where EC social policy would fit in), intervention by the public authorities may more easily bring about a tripartite kind of corporatism. This led Lehmbruch to the assumption that the more durable and stable the form of corporatism, the more it would be characterised by its simultaneous treatment of other interdependent problems arising from the conflict of labour and capital (ibid.: 305ff.). In Austria, too, the employers and agricultural federations (like UNICE at the EU level) for a long time rejected the establishment of corporatism (Tálos 1985:69ff.). In both the Austrian and the EC cases, it was the unions who urged co-operative policy-making. The activation of corporatist patterns in Austria after the Second World War correlates with stalemates within the coalition government on economic and social policy matters during the second

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half of the 1950s (ibid. 68). At the EU level, it was mainly the British veto strategy concerning a social dimension hampered by unanimity requirements which blocked the Council and prompted the search for a corporatist exit from this decision-trap. In a slightly different way, Ross (1997:16) touches upon this issue when seeing Economic and Monetary Union as ‘the price ETUC paid, over time, for its “gifts from strangers”’. Since Visser observed this dynamic at the EC level ‘but only at the very beginnings’ (1996:37), further significant developments have occurred, notably the signature of two collective agreements (see Chapter 4). It should, however, be noted that there is a specific situation at EC level: due to comparatively more divergent interests of memberships it is anyway extremely difficult to satisfy affiliates. Furthermore, it is de facto almost impossible for member organisations to exit from the European top federation—too well known is the reluctance of the EC Commission to grant comparable influence to single nation interest groups (and the practical difficulty for reasons of efficiency). Martin Rhodes was among those authors who rightly expected that ‘activity at the centre of EC policy-making will stimulate supranational pressure group development and other organizational growth—in line with neo-functionalist theory’ (1992:44). In addition, there seems more recently also a normative element to be involved. Many top representatives within the major national groups (e.g. the German DGB) rank the general goal of European unification quite high within their political priorities. When confronted with the post-Maastricht legitimacy crisis, they fear a far-reaching backlash and thus feel pushed to support the ‘European enterprise’. A frequently used image for a potential threat to the process of European integration is the ‘bicycle that falls as soon as it stands still’. One way for interest group leaders to become active is to provide legitimisation through co-operation with governments and EC institutions in the decisionmaking and implementation of joint policies. For the US case, Olson has argued that ‘[t]he judgement that the ‘special interests’—the individual industry groups— have disproportionate power, though the business community as a whole does not, is apparently consistent with the general trend of current affairs. For it seems that particular interests do win tax loopholes, favorable tariffs, special tax rulings, generous regulatory policies, and the like, but that the business community as a whole has been unsuccessful in its attempts to stop the trend towards social-welfare legislation and progressive taxation. (Olson 1965:148)

239 Cf. also Greenwood (1997:107): UNICE, whose own role as the voice of business during the 1980s came under threat from the establishment of ERT (European Round Table of Industrialists) and AMCHAM (EU Committee of the American Chamber of Commerce), has to some extent therefore developed an interest in the social dialogue mechanism.

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240 In addition to this ‘logic of economic competition’, there is also the cultural aspect that several national employer organisations have traditionally participated in social dialogue with labour at the national level and therefore tended to be less hostile to similar practice at the Euro-level. 241 Gorges mentions offhand that the Brussels-based staff might have conceded the point of Euro-level negotiations much earlier to the ETUC if the UNICE affiliates had not opposed it (1996:65). 6 Conclusions and the future 242 Even before the Amsterdam Treaty legally ends the opt-out, however, the UK Labour government elected in spring 1997 already decided de facto to participate in the Council deliberations under the Social Agreement. It is envisaged adopting Directives under Article 100 of the ECT on matters which are covered by Directives under the Social Agreement, in order to make them binding for the UK, too (see Europe, 28 July 1997: no. 16). 243 In the first cases under the Social Agreement (such as the 1996 Parental Leave Directive), there was governmental bargaining before the matter was transferred to the innovative legal basis. Nevertheless, the standards finally agreed were fixed by management and labour, not by the governments. 244 To give just one more prominent example, Leibfried and Pierson (1992:353, i.e. Pierson and Leibfried 1995b:454) found that ‘[a] corporatist style model of industrial relations and social policy at the EC level indeed seems to be a dead letter’. 245 Even if a policy area such as social policy stretches across all sectors of the economy, there is no macro-corporatism in the original sense if only specific social policy decisions are the object of ‘concertation’ without log-rolling across policy areas. I would therefore not refer to the recent national efforts to conclude tripartite deals with a view to e.g. wage moderation as ‘macro-corporatist’ in the classic sense. These patterns are more narrow in functional scope than the earlier generation of corporatism during the post-war but pre-Internal Market state of Europe (see Table 1.4). For a different terminological choice see Schmitter and Grote (1997:32) who nevertheless stress that with a view to major objectives, ‘[i]nternational competitiveness in specific products and sectors has replaced aggregate national growth’ (ibid.: 29). 246 Indeed, the very feature of the EU political system is fragmentation. From the outset, the EC Treaties provided for divergent competences and procedures in the specific issue areas. Over time, these regimes underwent further specification both in day-to-day politics and in constitutional reforms. In addition, there are huge differences in both patterns of interest representation and internal norms and values between the single clusters of the EC political system. A comparison of the results of this study with other EC policies, through the same conceptual lens, would be a rewarding task for future research. 247 These networks will often stretch across the various layers of regional governance. Only for analytical reasons can they be attributed to either cluster, depending on where the relevant regulative competences are located. 248 Viewed from a policy perspective, the variation may be captured by the patchwork fabric analogy. The horizontal patchwork style refers to sectoral differences that co-exist at both the EC and the national level. The vertical patchwork style refers to the co-existence of issues/sectors/domains which are

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252 253

254 255

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Europeanised and others which basically remain at the national level or are even infra-nationalised. In the context of this book, the EU is without doubt a functional equivalent to the state. Nowadays, the appropriate unit of analysis for studies of policy formation seems not the state as understood in the institutional sense, but the state as a collection of policy arenas incorporating both governmental and private actors (Atkinson and Coleman 1992:164 with further references). In fact, the pre-Maastricht style ‘social dialogue’ has little in common with the collective negotiations provided for under the Social Agreement (even UNICE criticised the confusion between the terms ‘social dialogue’ and ‘negotiation’; see Europe, 6 July 1992:14). Nevertheless, the Commission systematically includes both the non-binding Val Duchesse talks and the committing and substantive ‘negotiated legislation’ (Dølvik 1997:41) under the label of ‘social dialogue’ which has become a crucial label within contemporary Euro-speak. This involved above all the practical support for the negotiation monopoly of the three major groups (i.e. the stop to the legislative process and the proposal to implement the agreements by the Commission, the implementation of the Parental Leave and Part-Time Agreements by the Council). There was also significant logistic support for the various negotiations (notably in 1991) by the Commission. Schmitter contrasted ‘societal’ corporatism to ‘state’ corporatism, the latter being characterised by the subordination of interest organisations to the state, established by repressive imposition by authoritarian forces from above. This is why some authors have in fact referred to social policy as a macro domain, and Greenwood (1997:259) has even called UNICE, CEEP and ETUC the macroeconomic social partners (see also Greenwood 1995b:12). Nevertheless, it does not seem useful to go back to the vocabulary of the 1970s’ and 1980s’ debate on (neo-)corporatism and speak about macrocorporatism at the EC level. As outlined in section 1.2, the policy network terminology has aptly captured the fact that contemporary policy-making is, at all regional layers, broken down into issue-specific arenas. The CEEP, in turn, was set up in 1961 but took up cross-sectoral social policy tasks only much later. Even for Schmitter, his ‘elaborate definition’ was an ‘ideal-type description, a heuristic and logicoanalytical construct composed of a considerable variety of theoretically or hypothetically interrelated components’ which would hardly be perfectly reproduced in any extant system of interest representation (Schmitter 1974:14). The preferences in the EC Council are less well known to management and labour in those present and future cases which were not initially negotiated by the governments and only transferred to the Social Agreement with its corporatist patterns after stalemate under the pre-Amsterdam EC Treaty’s social chapter. Industry will nevertheless do its best to anticipate the presumptive smallest common denominator standards in the Council in order to shape the terms of prospective collective agreements. That labour was attributed more voice (although not necessarily more power) in EC social policy via the establishment of a corporatist policy community may be seen as a quid pro quo for accepting an Economic and Monetary Union along rather neo-liberal lines (which had been the ‘pet project’ of both big industry and the Commission in the 1990–91 IGC).

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258 This is yet another argument for not including shared views in the definition of policy networks (or policy communities) such as indicated by some writers. The latter would, furthermore, remove a distinctive difference of the policy networks approach as opposed to the epistemic communities approach (P.Haas 1992) and the advocacy coalition concept by Sabatier (1993). 259 In so far as the reshaping of preferences happens at the European level, intergovernmentalism is not equipped to observe it. 260 If so, it concerned rather specific details of EC social policy, mostly related to ECJ jurisprudence which narrowed the functional scope of some EC law when compared to earlier practice (for more detail see Falkner 1997). 261 As opposed to only ‘negative’ integration via the abolishment of economic borders and pre-existing national rules (see Scharpf e.g. 1996). 262 Some recent standards have given rise to widespread and fundamental criticism (e.g. in the case of the Directive on young workers, see section 3.1.3). 263 This may indeed be seen as a shortcoming of the spill-over concept in the neofunctionalist literature. 264 Even the 1997 Amsterdam Treaty’s employment chapter does not go far in the direction of changing that (see Griller et al. 1998). 265

The ‘good Europeans’ are not the main creators of the regional community that is growing up; the process of community formation is dominated by nationally constituted groups with specific interests and aims, willing and able to adjust their aspirations by turning to supranational means when this course appears profitable. (Haas 1958:xiv)

266 Moravcsik suggests ‘that intergovernmental demand for policy ideas, not the supranational supply of those ideas, is the fundamental exogenous factor driving integration’ (1995:618). With a view to the establishment of corporatist policy-making patterns in the Maastricht IGC, it was the Commission who created ‘demand’ for the empowerment of the social partners. Not only was the demand ‘produced’ by an EC institution, it was even the EC-level top representatives of labour and industry who (in co-operation with the Commission) proposed the text which was turned into EC primary law by the governments. While the Commission has actively promoted subnational mobilisation ‘to provide a counterweight to the power of state executives and to gain input from actual policy recipients’ (Hooghe 1995:24), it promoted social mobilisation with a view to promoting social dialogue and prompting corporatist patterns of policymaking to unburden the Council. The governments accepted sharing power not only ‘with one another and with the Community institutions’ (KohlerKoch 1996a:363) but also with the Euro-level social partners. Once again, we see that the Commission acts sucessfully as a policy entrepreneur (in the wider sense; see e.g. Cram 1994 for social and information technology policies; Matlary 1996 for energy policy). 267 This indicates that different models for various ‘levels’ of EC decisions (see Peterson 1995a; section 1.2) are not necessary. Not only are policy-shaping, policy-making and constitutional bargains interrelated (and this study indicates that the policy networks approach—in combination with more explanatory approaches—is a useful tool for studying change at all levels). So are substantive and procedural reforms: without the threat of more EC legislation based on

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QMV, UNICE would not have agreed to become a co-responsible partner in the policy process (see sections 2.2 and 5.1 for details). Although neither the Commission nor the EP are unitary actors (especially in social affairs, there are significant internal cleavages within both institutions), they have traditionally sought to promote the adoption of EC social standards. Authors talk about a historical institutionalist (Thelen and Steinmo 1992), ‘culturalist’ (Jachtenfuchs 1995), ‘reflectivist’ (Wind 1997), ‘constructivist’ (Lewis 1995) or ‘sociological (institutionalist)’ (Hall and Taylor 1996) approach in order to indicate the same assumption, i.e. that institutions (of all kinds) may even affect the preferences and identities of political actors. Measures such as the Directives on working time and parental leave (so-called group II measures under the 1989 social action programme; see section 3.1.3) concern parts of the overall labour cost whose role for competitiveness increases when capital’s mobility in enhanced. Euro-Works Councils or the posting of workers, by contrast, belong to market-related ‘group I measures’. Recently, the Council adopted a regulation on the elaboration of comparable statistical data on the labour costs in the single member states (see Europe, 6 January 1997:8). This might prepare the ground for forthcoming additional EC intervention in ‘group I’ matters. Although there are some unanimity requirements left even under the Amsterdam Treaty (e.g. on social security). Note, however, that even EC decisions under a unanimity requirement may follow supranational logics (see Falkner 1994a for details). See also Leibfried and Pierson (1995:75): Because control over social policy often means responsibility for announcing unpopular cutbacks, member-state governments sometimes are happy to accept arrangements that constrain their own options. …The movement towards a multi-tiered political system opens up new avenues for the politics of blame avoidance.

273 Other aspects of prospective EC level activity stay disputed (e.g. the funding of various social projects), and the paradigms for national social policy are a completely different matter not under discussion here.

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Index

Amsterdam Treaty 79, 154 atypical work 69, 129–45, 150

76–7, 95–6, 106, 113, 189, 191, 199, 200–4 implementation of collective agreements 83, 94, 124–6, 138, 144–5, 171, 187, 194 institutionalism 20–4, 203–4 intergovernmentalism 12–15, 19, 198–9 internal market programme 19–20; and social policy 59, 64–8, 95–6 issue networks 43, 48, 193

burden of proof 150–2 CBI 106, 128, 159, 191–2 CEEP 159–60, 161–4, 191–5 Commission, role of 89–94, 104–5, 126–7, 141, 147–8, 165–73, 193 consultation in national enterprises 150 corporatism 33–41, 75 corporatist decision gap 75–6, 205 corporatist policy community 46–8, 82–4, 149, 170, 185, 187–90, 193 co-evolution 41, 189

joint-decision trap 13–14, 56, 76, 205–6

EC competences in social policy 81–2, 55–60, 186 ECJ 61–2, 115, 142 ECOSOC 70 ETUC 71, 157–8, 161–4, 176, 178–80, 191–5 Euro-level institutions, role of 23, 88, 165–73, 177–8, 193, 200–1 European Parliament 80, 127–8, 148, 161 European social model 77, 95, 190 European Works Councils 69, 97–112, 150 federalism 5 functionalism 5–6 fusion model 16–17 ideas and EU policy-making 26–9,

logic of influence 180–5, 189–90, 192 logic of membership 180 multi-level governance 17–19 neofunctionalism 7–12, 19, 196–8 neo-voluntarism 153 opt-out 78–80 parental leave 114–29, 150 pluralism 31–3 policy communities 43–8, 193 policy networks 41–52, 188–9, 195–6 preference formation 24, 14–15, 24–6, 52–4, 88, 95–6, 200–4 qualified majority voting (QMV) 9, 23, 59–60, 65, 69, 81–2, 86–8, 96, 103, 107, 112, 146–7, 186, 205

253

254

Index

quality and amount of EC social standards 152–4, 198, 204–7

transactionalism 6, 19 Treaty-base game 65, 68, 88

representativeness of Euro-groups 164–9

UEAPME 145, 160, 164, 166–9, 183 UK, role of 60, 66, 68, 77, 80, 101, 115, 146 154 UNICE 74, 103, 158–9, 161–4, 176, 178–84, 191–5

sexual harassment 150–1 Social Charter of the E(E)C 66–7, 77 spillover 8–11, 56, 59–61, 196–8, 200 Standing Committee on Employment 71 subsidiarity 83–4,

Val Duchesse social dialogue 72–3, 76