The Curious Case of Employers Against Deregulation: Collective Bargaining Reforms in Southern Europe during the Eurozone Crisis

The literature in comparative political economy has shown that employers have played an important role in the process of decentralisation of collective bargaining systems that has taken place in Europe since the 1980s. Evidence from Sweden or Germany notably points to the leadership role of employers in exposed sectors in pushing for firm-level bargaining, allowing for wage increases more in line with the productivity and competitive position of individual firms, and a retreat from automatic extension rules imposing wage terms to whole economic sectors. In this context, the reforms of collective bargaining that have taken place in Portugal, Italy and Spain in the context of the Eurozone crisis present an interesting puzzle : employer organisations have opposed government-led initiatives to decentralise the collective bargaining framework and allow more flexibility for firms. The paper argues that the composition of employer organisations in these countries makes them more supportive of coordinated collective bargaining and extension clauses. In a context of low membership and prevalence of Small and Medium Enterprises, member firms are more likely to offer better conditions and use state-backed extension clauses to root out low-wage competitors.