An Industrial Relations Framework for the Euro Area: Efficient, Converging and Equitable

Abstract

The excessive high public debt of almost all member states of the euro area, resulting from diverging tendencies of economic development, requires appropriate adjustment mechanisms. The crucial role of industrial relations is strengthened by the introduction of the economic policy instruments of investment wages and collective capital formation. The European labour movement is thereby empowered, together with the European and national macro-economic policy institutions, to engage in the macro-economic control of the euro area. The trade unions, using their control over Wage-Earner Investment Funds, increase labour productivity in the regions and sectors of the euro area such that the imbalances of intra-euro-area trade are balanced out by direct foreign investment. An ecologically sustainable and inclusive economic development of the whole euro area is achieved. The introduction of investment wages should not only re-establish full-employment in the whole of the European Union, together with the co-determination of the enterprises it is also a key instrument to further economic democracy.

Keywords: collective capital formation, economic democracy, euro area, industrial relations, investment wages, macro-economic policy, trade unions, wage-earner funds

JEL Classification: E02, F15, F33, F41, F5, J5, O16