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7th European Regional Meeting in Budapest Trade unions in Central and Eastern Europe confront challenges

Throughout most of Europe, trade unions are struggling to meet the challenges posed by globalization. In the new EU Member States of Central and Eastern Europe (CEE), as well as other countries in Eastern and Southeast Europe, these difficulties have been compounded by the economic and social costs of transition to systems of market democracy.

Article | 18 February 2005

BUDAPEST – Despite significant achievements over the past decade of transition to market democracies, trade unions throughout the region continue to face tough issues: restoring real incomes and employment levels in the aftermath of transition, getting their voices heard in social dialogue, and representing workers' interests in an environment of rapidly changing social policies and reforms.

"Trade unions in CEE made the strategic decision in the early 1990s to be among the forces supporting democratization and the transition to a market economy", says Dimitrina Dimitrova, Senior Specialist for Workers' Activities at the ILO's Subregional Office for Central and Eastern Europe in Budapest. "The legitimization of independent trade unions depended largely on their support for democratic reforms and the peaceful transition to a market economy. Trade unions made the deliberate strategic choice to treat this as a top priority, although they were aware that the immediate economic interests of trade union members could suffer. At that time, everyone believed that workers' interests would be defended properly once the transition to market economy was complete."

The reform process took a neo-liberal turn almost everywhere in the region, and the austerity policies advocated by the international financial institutions played a major role, limiting trade unions' scope for strategic intervention, says Ms. Dimitrova. "Their historic compromise was somewhat unavoidable, but trade unions came out of this period considerably weakened", she adds.

Now workers' organizations are making great efforts to cope with deindustrialization, the growth of service industries and the expansion of the informal economy – just to name a few of today's main challenges. At the same time, they are attempting to assert a greater role in policy formation on a tripartite basis, and implement an EU-style system of bipartite sectoral dialogue. However, this is not always easy, say trade union representatives, given the frequent lack of an effective dialogue partner on the employers' side, and a tendency by governments to bypass dialogue when forming social policies.

Social dialogue: An uphill struggle

Most of the larger trade unions in the region have success stories in social dialogue, including major milestones in many countries – such as negotiations over the reform of labour legislation, in which they were able to make significant input. However, in many countries, trade unions perceive these successes as a thing of the past. As Ms. Dimitrova puts it: "Governments embraced social dialogue in the early 1990s, as they saw its consensus-building potential as an opportunity to respond to political and economic crises and to share responsibilities. However, their commitment vanished soon after the immediate threat of the crises was gone."

This agrees with the assessment in Romania, where tripartite discussions in the Economic and Social Committee (ESC) in 2000 helped form a new Labour Code and a medium-term strategy for sustainable development. But today the social partners have difficulty getting their voices heard, says Mirela Caravan, Head of the International Department at Romania's National Trade Union Bloc (BNS). "Social dialogue is not very effective, the social partners being consulted by the government only formally", says Ms. Caravan. "Only 30-40 per cent of draft laws are sent for analysis to the ESC, and even for this dim percentage, the observations or recommendations are disregarded."

In Hungary, social dialogue has remained of a consultative nature, with few actual agreements reached, says Imre Palkovics, President of the National Federation of Workers' Councils (MOTSZ). He adds that there have been no serious negotiations on strategic objectives or on major policy proposals. "Prior to a meeting, the government always sends materials too late for a proper analysis or for real, substantive comments. And this tendency has been independent of government cycles", he says.

There is a similar story in Croatia, according to Dusanka Marinkovic Draca, Head of the Industrial Relations Department at the Union of Autonomous Trade Unions of Croatia (SSSH). Although the legal framework for the country's ESC is "adequate", and trade unions have been able to influence some important laws, "we are far from satisfied with the effects", says Ms. Marinkovic Draca. "Our role is often reduced to the right to information, and not necessarily to looking for joint solutions." In addition, after each parliamentary election, "trade unions have to emphasize the need and obligation to develop social dialogue over and over again".

Trade union consolidation: On the horizon?

As noted by the European Commission in its report Industrial Relations in Europe 2004, published in January of this year, a major trend for trade unions in Western Europe has been consolidation through the merger of major trade union centres, resulting in the spread of "super-unions". However, the Commission notes that this trend is "less pronounced" in CEE Member States.

Croatia is certainly on the road to following the merger trend. The SSSH has already signed an agreement on cooperation with two other trade union confederations, says its President, Vesna Dejanovic. Under the agreement, a full merger of the SSSH with the Croatian Association of Trade Union (HUS) and Uni-Cro is targeted by 2006 or 2007, creating a trade union centre representing about 70 per cent of unionized workers in Croatia.

BNS in Romania also believes the workers' organizations should increase their concentration through "strong joint actions, unified viewpoints and mergers", says Ms. Caravan. Union organizations are already exchanging experience and information, and organizing actions of solidarity.

In Hungary, meanwhile, the trade union movement has six national centres – the most in the EU apart from France, according to the Commission's report. This goes back to the initial period of transition, where trade unions were sharply divided between the successor organizations to the former socialist unions and new, "transformational" unions. However, there now appear to be pressures for consolidation.