The Puzzle

In December 2008, when the president of the trade union confederation ögb , Rudolf Hundstorfer, became the new Austrian minister for social affairs, the magazine Profil presented his career move as a “deliberate downgrade”. In Austria, the magazine argued, the head of a social partner organisation ranked higher than a minister (Profil 2009). Along similar lines, the general secretary of the Dutch trade union confederation fnv , Agnes Jongerius, was described in de Volkskrant as the “real” minister for social affairs of the Netherlands . In the words of the leader of the liberal party vvd Mark Rutte, who would later become Prime Minister, the actual minister in office was nothing more than her hulpsinterklaas, a lookalike dressed like Santa Claus who is not the real Santa Claus (de Volkskrant 2009). Finally, a Swiss trade unionist interviewed in September 2011 argued that the president of the business association Economiesuisse was “worth three ministers” in terms of his influence on policy decisions in Switzerland. Given that the Swiss federal government only counts seven ministries, it was clear who “called the tune” in this country (Le Temps 2011).

Even if these statements may be exaggerated, they nevertheless highlight the central role that trade unions and business associations still play in the political systems of many European countries, especially when it comes to welfare and labour market policies. Negotiations between governments, labour and business representatives – or social concertation – influence many important policies such as the mandatory age of retirement, the strictness of employment protection, the extent of wage increases, or the level of unemployment benefits. Insofar as these negotiations determine whose interests are taken into account and prioritised in policy reforms, they decisively shape the setup of welfare states and labour markets in Europe. They influence the distribution and redistribution of wealth, the degree to which workers are protected against social risks such as unemployment, sickness and poverty, and are believed to strongly influence economic performance. For instance, agreements between organised labour and employers have been considered central in paving the way for the employment “miracles “ that countries such as the Netherlands or Ireland experienced in the 1990s and 2000s (Baccaro & Simoni 2007; Visser & Hemerijck 1997).