Table 4 Main changes in wage setting institutions
2006
Collectivisation
Centralisation
Wage bargaining coverage
Dominant level of bargaining
Level of bargaining for adaptation to cyclical fluctuations
Frequency of deviation from central agreement/possibility of deviation
Medium to high in all countries except EE, IE, SK where it was low
Generally sector dominant
n.a.
Rarely used Not possible in IE, CY, LU, SK, FI
IE: national EE, MT: company FR: sectoral/company
2011
Medium to high in all countries except CY, EE, IE, SK where it is low
Generally sector dominant IE: national
Company and/or sectoral in most countries
Rarely used Not possible in IE, CY, LU, SK, FI
EE, MT: company FR: sectoral/company
Main changes 2006-11
IE: national level wage bargaining framework not formally terminated, yet structures have been in abeyance and provisions in respect of pay have lapsed ES: prevalence of firm level agreements established by law
DE, SI: increased use GR, ES: opt-out now possible by firm-level agreement when in economic difficulty, but not much used In GR PT, IT: easier, but still limited use.
BE: no wage norm decided for 2009-2010, only limited one-off increases
As regards the latest changes during the downturn, in Greece the extension of sectoral collective agreements to all firms in the sector has been suspended for the length of the medium-term fiscal plan. A related characteristic is centralisation, which essentially refers to the level(s) at which bargaining takes place. In most euro area countries wages are negotiated at multiple levels, but the dominant level tends to be the sectoral level, even if broader national level agreements may sometimes also exist. Ireland is the only euro area country where such national level agreements are also the dominant ones.51 In Belgium (where an indicative wage norm,
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ECB Euro area labour markets and the crisis October 2012
taking into consideration wage developments in neighbouring countries, normally establishes a guideline for wage increases), in response to the crisis, no nominal wage norm was decided upon for the period 2009-2010. In Spain, a reform of the collective bargaining system in June 2011 established the prevalence of firm-level collective agreements.52
51 In this respect, it is noteworthy that the final phase of the most recent National Wage Agreement expired during 2010 and no formal agreement on pay determination is envisaged in the short-term. 52 Although sectoral agreements at the national or regional level may overturn this prevalence. However, a further reform, in February 2012, has eliminated this possibility)