Labour Market Reforms Under the Shadow of the Troika in Ireland and Portugal

During the Eurozone crisis, the Irish and Portuguese governments implemented various structural reforms contained in the Memorandums of Understanding (MoU) in exchange of financial help by the Troika. The content of the labour market policies included in the Memorandums converged towards a similar labour relations model based on deregulation and flexibilisation. However, processes of policymaking leading to those reforms in each country were quite different.

Whereas in Ireland all the measures were approved without negotiation with the Irish Congress of Trade Union (ICTU), in Portugal an agreement on the revision of the Labour Code was signed in 2012 between the PSD-CDS government and one of the major confederations, the General Union of Workers (UGT).

This papers aims at explaining why and under what conditions a social agreement on labour market reform was possible in Portugal and not in Ireland. To obtain a full understanding of what happened, we triangulate different types of data: 1) face-to-face interviews with former ministers, Interest representatives, and troika members; 2) investigations by journalists; and 3) Interest representatives, IMF and EU official documents. In so doing, we focus especially on the strategic interaction between governments, trade unions and the representatives of the Troika. Our main argument is that the existence of competitive relations between confederations is a crucial condition for getting an agreement.