COMPETITIVENESS BOARDS: A THREAT TO COLLECTIVE BARGAINING? CCCB COMMITTEE OF THE ETUC NOVEMBER 2015

THE COMMISSION’S PROPOSAL Commission wants European Council to agree to a Council Recommendation that requests all euro area member states to set up a National Competitiveness Board (Non euro members can join this if they want) Independent experts, not to be influenced by ‘stakeholders’ (social partners should be consulted as a relevant stakeholder)

WHAT EXACTLY WILL THESE COMPETITIVENESS BOARDS BE DOING? Monitor competitiveness developments relative to global competitors. This includes wage dynamics (short term). Inform the wage setting process by providing relevant information. Monitor policies and formulate policy advise in the field of competitiveness. Provide advice on the implementation of the Country Specific Recommendations

THE COMMISSION’S PROPOSAL There is language on taking national wage formation systems into account and not affecting the right to negotiate collectively and to take collective action (but this is only written in the recitals) However, ‘mission creep’ is already in the pipeline: Boards need to be statutory: Points to a legalistic approach to wage competitivenesstional law. Future progress report to see ”whether the adoption of binding provisions appears necessary” is already being announced (after 6 months) Accompanying Commission Communication: “if necessary in stage 2 (…) common principles by means of a binding instrument will be presented”. Stage 2 = Mid 2017

THE COMMISSION’S PROPOSAL Basically, stage is being set for a general (euro area wide) trespassing into the domain of wage bargaining… … and this under the banner of ‘competitiveness’ Inspired by the Belgian law on competitiveness and wages Experience of Belgian trade unions: Works systematically to the advantage of employers, Allows government to intervene in wages, even when this goes against collective agreements already concluded Organizes the ‘race to the bottom’: The lower wage dynamics in Germany/France, the more the legal wage margins in Belgium get compressed

THE ETUC RESOLUTION EXECUTIVE COMMITTEE OCTOBER 2015 Basic position: The ETUC rejects these National Competitiveness Boards. « We do not accept any institution (or the basis of such institution) that interfere with the autonomy of the social partners »

MORE ARGUMENTS The wrong problem: With an external surplus of more than 3% of GDP, does the euro area need to improve ‘competitiveness’ further? A dangerous policy: Trying to export our problems by deflationary wage setting and this in the face of already high debt burdens??? Risk of similar councils run by social partners or where social partners are included being set aside by technocratic Competitiveness Boards Competitiveness (especially when it is global competition) is not about wages: Do not compete with China on wages, also not in the short run Economic pillar of Europe is already strong enough, time to strenghten the social pillar

ETUC ACTION Letter to European Council Requesting affiliates to approach their government First best option: Reject it Second best option : Amend it An enlarged wage safeguard clause in the body of the legal text, protecting national systems of bargaining, right to bargain collectively and minimum wage setting at national and sectoral level along with collective barhaining Remove legal and advisory capacity from these boards Steer focus away from wages and exclusively towards quaity factors of (global) competition