Christoph Hermann

Liberalisation and privatisation of public services and strategic options for European trade unions

This article argues that liberalisation and privatisation of public services in Europe have had a significant impact on employment and working conditions. Our basic hypothesis is that companies aff...

Crisis, structural reform and the dismantling of the European Social Model(s)

The president of the European Central Bank, Mario Draghi, stated in an interview that the European Social Model (ESM) is ‘gone’. In the same interview he also underlined the need for structural reform as a precondition for renewed growth in Europe. The main hypothesis of this article is that the simultaneous mentioning of the end of the ESM and the need for structural reform was not a coincidence. Structural reforms as adopted during the crisis are threatening the European Social Model(s). This can also be seen in the growth of poverty and inequality in the crisis countries. The article, furthermore, argues that the shift from the Open Method of Coordination to Economic Governance could increase pressure on other countries to introduce similar reforms, further weakening the ESM.

The liberalization of public services : Company reactions and consequences for employment and working conditions

This article analyses how companies that provide public services respond to liberalization, privatization and marketization. The empirical research is based on 23 company case studies from four sectors and six countries. The case studies involved 185 interviews with managers, trade union and works council representatives and workers. Company reactions include mergers and acquisitions, internationalization and the diversification of supply; the diversification of customer relations, including new pricing policies; a reduction of production costs through concentration, outsourcing and the introduction of new technology; and the reduction of employment and the payment of lower wages (through lower wages for new employees, the creation of independent subsidiaries and outsourcing). Overall, the case studies show that the main goal, the reduction of production costs, has been achieved at the cost of workers, many of whom have experienced liberalization and privatization as the deterioration of employment and working conditions. The impact on productivity and quality were mixed.

The European social model: Between competitive modernisation and neoliberal resistance

The ‘European social model’ is a phrase often heard in European discourse. This article describes the remarkable shift in meaning that the term has experienced in the last two decades. While it was first invented to symbolise Delorss vision of a social-democratic Europe, it was then increasingly used to legitimise a predominately neoliberal integration process, before becoming a justification for the cutting back of existing welfare systems. The popularity of the European social model, however, still stems from the fact that it articulates an alternative to US-style free-market capitalism. The concept is therefore also used by left forces in order to formulate their vision of an alternative Europe.

Is Institutional Continuity Masking a Creeping Paradigm Shift in the Austrian Social Model

The ‘varieties of capitalism literature focuses on large (Western European and North American) countries’. Depending on the authors, the literature differentiates between two (Albert, 1993; Hall and Soskice, 2001), three (Coates, 2000) and five models (Amable, 2005). Small and economically less powerful countries such as Austria are hardly mentioned in the debate. On the other hand there is a body of literature that discusses the periodically stunning economic and labour market successes of small countries, sometimes presented even as role models for the rest of Europe (Katzenstein, 1985; Auer, 2000). A common weakness of the varieties of capitalism literature is that it does not take into account the interdependence between different models, in particular between large and small countries. The relationship between Austria and its ten times larger northern neighbour Germany is a case in point. Many German companies have subsidiaries in Austria. The relative dependence on German capital has an important impact on the Austrian model and limits the choices of domestic actors (the same is true for the new European member states with even larger proportions of foreign direct investments [FDI]). On the other hand small states tend to adjust faster to new challenges and have opportunities that are blocked for large countries. Wage restraint and export-orientation may work for Austria but not for a reunified Germany in an enlarged Europe (see Chapter 4, this volume). At the same time the example of Austria, which as a result of EU enlargement into Central and Eastern Europe (CEE) has itself become a net capital exporter, also shows the advantages of economic power over other countries.

Crisis and social policy in Europe

International Monetary Fund [IMF]) conditionality in exchange for financial assistance to meet debt repayment obligations. Turning attention to one of the Troika members, the IMF, Antje Vetterlein argues that during the 1990s the IMF had undergone an organizational crisis leading it, after the Asian Financial Crisis, to participate in Poverty Reduction Strategies, thus enhancing its social policy role. But after the 2007 crisis, the IMF, having already recovered its traditional power position, found its international role enhanced by the crisis and focused on economic issues to the exclusion of the social and de-emphasized its attention to poverty issues. By contrast, in Anthony Hall’s account, the World Bank markedly increased its financial support for social protection, albeit by the established methods of cash and in-kind transfers to the chronically poor. He observes that the scale of World Bank social policy activity thus expanded rapidly, but that critics point to problems with the distribution of the assistance (middle-income countries faring better than low-income ones) and programmes remaining targeted rather than universal, features that were consistent with a Washington consensus approach to poverty mitigation. In organizational terms, the crisis led to rejuvenation of the role of the International Labour Organization (ILO) as it did in a different way for the IMF’s role. In addition to developing the narrative of the crisis as one of jobs at the global level, the ILO was able, as James Canonge describes it, to open new policy space and to advance and win widespread endorsement for its concept of basic income security for all, through nationallydefined floors of social protection. The balance of policy responses to the crisis emerging from the above discussion seems embedded in our final international organization, the Organization for Economic Development and Cooperation (OECD). Jessica Merolli finds that the OECD response predominantly shows continuity from its pre-crisis neoliberal posture. Amidst the familiar litany, however, there are examples that may indicate a potential for new thinking that will be worth monitoring in the future. Did the crisis provoke new thinking about social policy? For the most part, it does not seem so. Yet, some indications of change were noted, and it can be said that the crisis may be far from over and that the same may be true of the development of alternative visions of social policy.

The public sector and equality

After years of neglect, inequality is back on the political agenda. The International Labour Organization has proposed the introduction of so-called social protection floors to tackle poverty in the age of globalization. However, little attention has been paid to the role of the public sector for limiting inequality. This is surprising in the light that new research shows the positive impact of public services such as health care and education for improving or maintaining equality. In some countries, access to public services is even more important in terms of redistribution than taxes and social benefits. Yet while the public sector hardly plays a role in discussions on equality, equality is mostly absent in the debates on public sector reforms. Here the main focus of the discussion is efficiency. The purpose of this article is twofold: on the one hand, it introduces the public sector as a major factor into the debates about inequality; on the other, it sheds light on the consequences of privatization, liberalization, and marketization of public services for equality.