Assessing the de-activation of social pacting in Spain and Portugal under austerity ( ). Preserving Reputation rather than legitimacy

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1 Assessing the de-activation of social pacting in Spain and Portugal under austerity ( ). Preserving Reputation rather than legitimacy Sergio González Begega (Universidad de Oviedo, Spain) David Luque Balbona (Universidad de Oviedo, Spain) Paper prepared to The Conference The welfare state in Portugal in the age of austerity held in Lisbon, Portugal, May 9 10, Abstract In most European countries, the reform agenda on socioeconomic issues has been backed by social pacts throughout recent decades. However, the upsurge of the economic crisis has hampered this general orientation towards agreement and consensus. Since 2008 there has been a transformation «from negotiation to imposition» which has been particularly severe in Southern Europe. In Spain and Portugal, the implementation of unilateral reforms by the governments under the surveillance of the European institutions has provoked the weakening of social pacts. The article evaluates the reconfiguration of the relation between governments and social partners in these two countries as a consequence of the economic crisis. It also analyses the emergence of a new dynamic of corporatist political exchange which combines irregular and short-range dialogue with confrontation. Keywords Social dialogue; governments; social partners; corporatist political exchange; social and industrial conflict. Introduction 1 Social pacting has constituted one of the central elements of the model of determination of socioeconomic policies in Western Europe. The evidence available on social pacts shows that these instruments of consensus construction around the public agenda have been used intensively in the last few decades. Between 1980 and 2006 a total of 110 social pacts were reached within the European Union of sixteen (UE-15), as well as Norway (Hamann and Kelly, 2011). Social pacting has served to reinforce the legitimacy of public decision making but also to direct the sense of the reforms. However, the irruption of the economic crisis in 2008 has caused a drift from «negotiation to imposition», which has been particularly intense in southern Europe. In Spain or Portugal, the stability of the corporatist devices for the production of public policies has been threatened as a result of the strategic reorientation of the governments and the reaction of the social partners (Campos Lima and Martin Artiles, 2011). The incentives for the use of social pacting have been reduced. The monitoring of the communitarian institutions and the narrowing of the national political area of decision making have negatively affected the 1 The article is one of the results of the research project CABISE (Capitalismo del bienestar en el sur de Europa: a comparative analysis), financed by the National Plan of R+D+i of the Ministery of Science and Innovation (reference: CSO ). 1

2 perception of governments and social partners on the utility of social pacting (Molina and Miguélez, 2013). The economic crisis has eroded the consensual logic that governments and social partners have shared in both countries since their respective transitions towards democracy. It has also reshaped the relations and political balances between governments and trade unions (Hyman and Gumbrell-McCormick, 2010). Social pacts became a basic instrument for policy making on the labour market, welfare and the distribution of income. The orientation towards agreement contributed decisively to the stabilization of the new democratic regimes. The institutionalization of the shared responsibility of the social partners in the design of public policies favoured the moderation of disputes and accompanied the effort of the extension of social rights in education, health and social security matters in the early eighties (O Donnell and Schmitter, 1986). Similarly, social pacts were a backdrop for the different reforms put into practice a decade later to reach the objectives of convergence in the Economic and Monetary Union (EMU) (Rhodes, 1998). In both countries, social pacting has served to endorse and to legitimize the agenda of reforms. Due to its functionality, it became a political tool of preferred use under contexts of economic challenge of great magnitude ( economic load ), at least until the outset of the current economic crisis (Avdagic, 2010). From the year 2008, however, a progressive deterioration of confidence in this type of political instrument has been detected. The intensity of the crisis, the indirect or formal intervention of the Spanish and Portuguese finances by European institutions or the necessity to respond effectively (that is to say, immediately) to the pressures of the international markets, have reduced the interest of social pacting. The governments have found alternative sources of legitimacy for their policies, that are located outside the national political sphere. The trade unions have had many difficulties to commit themselves to a programme of cutbacks that is seriously harmful to the interests of those they represent. The rigorous demands of flexibility on the labour market, rationalization of the Welfare State and of redefinition of income structures, inclined towards the containment of labour costs, have distanced the union organizations from the possibility of agreement. Management has avoided commiting itself in the reactivation of the social dialogue, showing its preference for other strategies of informal influence on the agenda of reforms. The deterioration of the relations between governments and social partners has first slowed down and later paralyzed the production of new social pacts. The routes of dialogue have been fractured and the trade unions have been expelled from public decision making. Culpepper and Regan (2014), in a recent analysis of the evolution of social dialogue in Ireland and Italy, indicate that the economic crisis has interrupted the dynamics of social pacting in both countries permanently. The political exclusion of the trade unions is a result of the loss of the capacity to threaten governments through protests or to seduce them through political exchange and from the provision of additional legitimacy. The economic crisis has reduced the unions to an interest group like any other. The aim of this article is to discuss to what extent this argument which connects the abandonment of social pacting and the loss of public influence of the trade unions is equally appropriate to describe the process of deterioration of political exchange between governments and social partners in another two countries of the European periphery, like Spain and Portugal. In both cases the countries have been severely affected by the economic crisis and strongly conditioned politically and by the communitarian institutions. The article will be structured as follows. Firstly, a review of the evolution and changes in the functionality of social pacting in Europe will be offered, within the different currents of debate on corporatism. Then the trajectory of the political exchanges between governments and social partners in Spain and Portugal will be approached, paying special attention to the transformations in the context of the crisis. Two sections, one for each country, will evaluate the stability of social pacting in the context of the economic crisis and the implementation of a 2

3 dynamic of «boxing and dancing» (Huzzard, 2004). The section of conclusions will critically reexamine the argument around the definitive abandonment of social pacting as an instrument of construction of public policies. The increase of confrontation and the preference of the governments for unilateral action under pressure from the communitarian institutions have caused, obviously, the reconfiguration of the political exchange between the government and social partners in both countries. But this reconfiguration does not necessarily imply the rupture, oblivion or complete deactivation of the dynamics of social pacting. Social pacting and political exchange Social pacting constitutes an element of basic definition of the model of coordinated capitalism (Hall and Soskice, 2001). The political exchange between governments and social partners represents a specific characteristic of the formulation of public policies in western Europe. The social pacts have been effective to manage the expansion of the Fordist-industrial accumulation model of the postwar period (Winkler, 1977; Korpi, 1978; Panitch, 1979; 1980). But they have also served to rationalize it, from a conceptual change in the nineties (Baccaro, 2003). The move towards consensus has been established in numerous European countries. Social pacting has been used as a tool to involve the most representative interest groups of civil society in the agenda of reforms while also adding additional legitimacy (Habermas, 1989). The discussions on the evolution and functionality of social pacting in Europe have been placed within a wider conceptual and analytical frame, such as the debate on corporatism. Panitch (1980: 159) has insisted on the polysemic and internally complex character of the term corporatism, which has been used indistinctly to refer to «connote a distinct economic system or mode of production ( ), a state form ( ) and a system of interest intermediation», alternative to pluralism. Currently, the most extended elaboration of corporatism is that which, like political theory, refers to the practices by which governments share their prerogative of design and implementation of public policies with certain interest groups of civil society. Corporatism is based on a political exchange of reciprocal goods, generally institutionalization in exchange for legitimation, that is operative by providing additional stability to public decision making (Schmitter, 1974). Social pacts are the materialization in the socioeconomic sphere of this political exchange, that here includes governments, trade unions and business managers. The diversity of forms that the corporatist political exchange has taken in the socioeconomic scope is very ample. The objectives pursued through social pacting have varied throughout the decades. The initial notion of social pacting as an instrument of redistribution of income and containment of class conflict has given way to a new understanding of it. Since the nineties, social pacting has fundamentally served to support the agenda of reforms on the labour market, the central provisions of the Welfare State and income policies, although in a rationalizing and competitive sense (Rhodes, 1998; 2000). Governments, trade unions and business managers are all involved in social pacts pursuing different interests. But all of them have found these political instruments useful. The literature emphasizes the functionality of social pacting as a tool for the design of effective policies under conditions of special difficulty and faced by the imminence of economic and political challenges that demand far-reaching adjustments ( economic and political load ) (Avdagic, 2011). Social pacting is the expression of a process of political exchange between governments and social partners, in which is developed «a game which takes place in the institutional arena in which each player controls resources that the others desire» (Öberg et al., 2011: 366). Schematically, the government controls the legislation, taxation and public spending and is directly in charge of the elaboration of the socioeconomic agenda. But the social partners, and especially the trade unions, also have resources wanted by the governments: in particular, the capacity of activation of conflict through control of their affiliates (Behrens, Hamann and Hurd, 3

4 2004). The search for agreement with the trade unions becomes something desirable for the governments providing they retain their power of social-labour mobilization (Baccaro and Simoni, 2008). The activation or deactivation of the dynamics of social pacting depends on the strategy, interest and resources of the stakeholders. That is to say, of the political exchange that takes place if and when the different stakeholders desire. In some countries, there are institutionalized protocols that indicate under what circumstances the negotiation must be activated. In the countries of the south of Europe, on the contrary, the initiative of activation of social dialogue corresponds to the stakeholder which is strongest in resources: the government. Traditionally, when the government deactivates or abandons the political exchange «the trade unions themselves or their affiliates can consider it opportune to adopt an aggressive position» (Pizzorno, 1978: 401). Conflict is a strategy of the political exchange itself, contemplated fundamentally in an attempt to reactivate the negotiation (Hamann, Johnston and Kelly, 2013). The corporatist political exchange has remained stable in continental Europe throughout recent decades, apart from the existence of superficial changes in the structure and the objectives of the social pacts. The economic crisis initiated in 2008 has altered this stability in the countries on the outskirts of Europe. The formal or informal intervention of a set of economies of the Eurozone has affected the interest of the governments in social pacting. The economic crisis has accelerated the process of integration of European fiscal policies and expenditure, reducing the space of political determination of the bail-outed countries. In this scenario, the capacity of social pacting to contribute to the agenda of reforms has been questioned. The economic crisis is also the crisis of social pacting on the periphery of the Eurozone. The doubts on the viability of social dialogue as a system of political formulation have reemerged more than two decades later. In fact, this is not the first time that some authors anticipate the demise of corporatism as a result of the loss of the capacity of pressure by the trade unions and the weakening of the class conflict (Lash and Urry, 1987; Pierson, 1994; Grahl and Teague, 1997). It is not the first time either that the loss of coherence of the nation-state is brought into question as a framework for political formulation faced with the push of European integration and globalization (Streeck and Schmitter, 1991). Social pacting experienced an important decline at the end of the eighties and at the beginning of the nineties, but was reactivated with force in the second half of the decade to push the agenda of reforms which permitted the fulfillment of the macroeconomic objectives of Maastricht and the incorporation to the Economic and Monetary Union (EMU) (Avdagic, Rhodes and Visser, 2011; Hancké, 2013). The corporatist political exchange was reactivated, although it was done from different structures, objectives and balances between the stakeholders. Social dialogue survived as an instrument of formulation of public policies. However, it experienced a deep internal reconfiguration. The social pacts were oriented towards a competitive and non-redistributive logic. The new political exchange between governments and social partners was distinguished «from traditional forms of social corporatism and to signal their competitiveness rationale. These pacts ( ) have major implications for welfare states by bridging, and innovating in linkages, between the informal and formal welfare states, that is between social security systems and labour market rules and regulations. All of the consist of new market conforming policy mixes. But they are also far from being the vehicles for neo-liberal hegemony in social and employment policy-making» (Rhodes, 2000: 165). The creation of the Economic and Monetary Union initially reinforced the interest for social pacting. The competitive social pacts facilitated the consensus on the agenda of reforms on the road to Maastricht and they made the maintenance of the national social dialogue compatible in the context of European integration. After the creation of the Euro, social pacting conserved its functionality as an instrument of reconfiguration of organized capitalism in the context of 4

5 globalization (Grote and Schmitter, 2003). Firstly, by assuring the containment of inflation and wage competitiveness between member states (Hancke and Rhodes, 2005; Hassel, 2003; 2006; Hancke, 2013). Secondly, by creating consensus on the reform of the Welfare State (Hemerijck, 2003; Siegel, 2005). And thirdly, by palliating the absence of a space of social dialogue suitably consolidated at a European level (Natali and Pochet, 2009). Another characteristic of the new model of competitive corporatist political exchange is the decline of conflict. The loss of vigor of the protest and the reduced capacity of confrontation of the trade unions have thrown these organizations into different types of internal crisis. The establishment of diverse strategies of revitalization to try and recover influence is a characteristic of the definition of European unionism since the nineties. In most cases, the impulse of social pacting has constituted a central element of these strategies (Frege and Kelly, 2003). Social pacting in Spain and Portugal. From vitality to exhaustion Spain and Portugal offer two stable models of construction of public policies through social pacting from their respective transitions to democracy. At first, social pacting served to support the recently created democratic structures, helping to define the frame of the labour relations and also to consolidate not only the trade unions and business management but also the governments. As of the nineties social pacting in Spain and Portugal experienced a competitive reorientation similar to that of other European countries. The Economic and Monetary Union (EMU) fuelled the reactivation of social dialogue and gave it interest. Like in other countries with serious problems of deficit and inflation, the Spanish and Portuguese governments «found very clear incentives to commit to social pacting ( ), using it to facilitate the adjustment processes» and for that reason they decided to summon to dialogue the social partners (Hancke and Rhodes, 2005: 201). The structures on which this new social dialogue was carried out were different. In Spain, the social pacts were negotiated and reached on a fragmented structure, approaching the different elements of the agenda of reforms separately (Alonso, 1994; Molina and Rhodes, 2011). In Portugal, however, the social dialogue was centralized, reaching a series of tripartite commitments that closely related to each other the reforms in the areas of salaries, labour market and welfare and with regard to the objectives of macroeconomic stability (Avdagic, 2010). The tendencies of fragmentation of the Portuguese social dialogue appeared later, once inside the EMU (Campos Lima and Naumann, 2011). The degree of commitment of the trade unions towards the objectives of the social dialogue has also been different in Spain and Portugal. The two main Spanish trade union organizations, Comisiones Obreras (CCOO) and Unión General de Trabajadores (UGT) soon assumed the competitive logic of the new social pacts and have maintained their support towards them in a stable way (Royo, 2007). The strategy of unified union action maintained at a political level since the general strike of 1988 has contributed to avoid internal ruptures. On the other hand, in Portugal the two principal trade unions, União Geral de Trabalhadores (UGT-P) and Confederação Geral dos Trabalhadores Portugueses (CGTP) have conserved greater strategic autonomy. UGT-P had committed regularly to the social dialogue with the government and management, whereas CGTP has shown greater reluctance to support the government's agenda of reforms through the participation in social pacting (Campos Lima and Martín Artiles, 2011). Despite these differences, the political exchange between government and social partners in Spain and Portugal shows important similarities. In both cases, the continuity of the social dialogue has been negatively affected by the absence of a stable institutional frame. In both countries, social pacting has been the result of the occasional activation of negotiation processes. Generally, the political exchange has been deactivated or put on the back burner 5

6 once the reform objectives that account for the opening of the negotiation have been reached. The social dialogue has responded fundamentally to the initiative and to the interests of the government, both in the activation and in the engineering of the political exchange. The discontinuity of the social dialogue has affected the level of institutionalization of trade unions and management, which has been traditionally weak (Campos Lima and Naumann, 2011; González Begega and Luque Balbona, article in press). But the Spanish and Portuguese social partners are also weak in organizational terms. The density of affiliation of the union organizations in both countries has been traditionally low (Schnabel, 2012). For that reason the participation in the social dialogue has been perceived as a route to compensate the problems of affiliation with institutionalization, despite its deficiencies. As has happened in other countries of southern Europe, the trade unions have involved themselves in social pacts looking for an alternative source of social legitimacy to resolve their internal problems of representativeness. However, the Spanish and Portuguese trade unions are not ineffective or smaller stakeholders as a result of their organizational weakness and their institutional dependency. In both cases, these organizations have managed to maintain a high degree of influence on the public domain through the management of the socio-labour conflict. In the case of Spain, but also of Portugal, the trade unions have been reasonably efficient when introducing their interests in the political agenda through mobilization and protests, as part of the political exchange with the government and business managers (Luque Balbona, 2012) at least until The irruption of the economic crisis has altered the stability of the dynamics of social pacting. As of 2010 and as a result of the close monitoring of the Spanish and Portuguese finances by the communitarian authorities, the governments of both countries have tended more towards the unilateral adoption of reform policies (Campos Lima and Martín Artiles, 2011: 389). It has been the governments and not the social partners who have lost interest in social pacting, questioning tacitly although not openly their effectiveness to accompany the design of the imposed or suggested adjustment policies from Brussels (Molina and Miguélez, 2013). The unions have reacted to the government's abandonment of the social dialogue with a mixed strategy of «boxing and dancing» that combines the increase of response with the acceptance of participating in the fewer and fewer open processes of political exchange (Huzzard, 2004). The use of conflict to ask for the reactivation of the social pacts shows the institutional dependency of the trade unions with regard to the system of social dialogue. Social pacting is perceived by the trade unions as an essential resource to preserve their influence in the area of public policy. Despite the parallelisms, the erosion of social pacting in Spain and Portugal in the context of the economic crisis also offers differences. Firstly, difference of context as the economic intervention of the Portuguese public finances has been total whereas the Spanish bail-out has been restricted formally to a part of the private financial sector. The evolution of the economy, the rate of unemployment or the levels of public debt have not been exactly the same either, as shown in Table 1. Secondly, there are also differences of political agreement because in spite of the high degree of monitoring, the Spanish government has had a greater margin than the Portuguese to design its own agenda of adjustments in the labour market, the provisions of welfare and taxation and income policies. And thirdly, differences of strategies, because the different stakeholders have been limited by their earlier trajectory of alliances and decisions when mixing episodes of confrontation and new (although limited) processes of social dialogue. Table 1. Unemployment rates (annual average), variation of the Gross National Product (GNP) and public deficit as a percentage of the GNP in Spain and Portugal ( ) Spain Unemployment rate 11,3 18,0 20,1 21,7 25,0 26,4 6

7 GDP variation (anual) 0,9-3,8-0,2 0,1-1,6-1,2 Public deficit -4,5-11,1-9,6-9,6-10,6 - Portugal Unemployment rate 8,5 10,6 12,0 12,9 15,9 16,5 GDP variation (annual) 0,0-2,9 1,9-1,3-3,2 1,7 Public deficit -3,6-10,2-9,8-4,3-6,4 - Source: Eurostat. Economic crisis and dynamics of tripartite and bipartite social pacting in Spain Social pacting has followed a path of progressive deterioration in Spain in the context of the economic crisis. The point of inflection is situated at the beginning of 2010, since in the first two years of the crisis several attempts were made to activate a tripartite social pact of crosssectional contents about the labour market, welfare and income. The deterioration has affected more the tripartite dimension of the social dialogue. That is to say, the exchanges between governments and trade unions. However, the bipartite social dialogue has shown a greater vitality and continuity, with the negotiation and renovation of several agreements between business managers and trade unions. The contents of these bipartite agreements have aimed to confront the problem of the loss of competitiveness of the Spanish economy, approaching questions such as the moderation of salaries, functional mobility or the internal flexibility of the workforce as a measure to try to contain the destruction of employment. In any case, the greater capacity of resistance of the bipartite social pacts compared with the tripartite pacts in crisis scenarios seems to have become a feature characteristic of the Spanish corporatist model (Molina and Miguélez, 2013). The behaviour of the economy has been very negative. After the retirement of the package of public incentives, at the end of 2010, and after a sluggish phase, the GNP suffered nine consecutive quarters of negative growth, until the third quarter of The effects of the crisis of sovereign debt in the Eurozone, the problems of fiscal consolidation of the Spanish public finances and the contraction of internal demand have negatively affected the behaviour of the Spanish economy throughout the period (CES, 2012: 151). Together with the evolution of the labour market, the imbalance of the public finances has been one of the main causes of concern of the political agenda. The gross national debt of the Spanish economy has ascended from 40.2% of the GNP at the end of 2008 to 93.9% at the end of The problem of the public deficit has not been solved in spite of the adjustments in matters of spending and fiscality undertaken by the PSOE socialist government, until November 2012 and, since then, by the conservative government of the Partido Popular (PP). The shortage of public resources has reduced the capacity of the government to offer the social partners some type of compensation in exchange for the adjustments. The closer monitoring of the communitarian institutions has inclined the governments towards the unilateral path and the abandonment of social pacting (Godino and Molina, 2011). The first phase of the crisis in Spain, between 2008 and May 2010, was characterized by the continuity and even the effort of intensification of the dynamics of social pacts. The signing of the Declaration to boost of the economy, employment and competitiveness by the government and social partners in July 2008 constitutes the last coordinated attempt to increase the resistance of the Spanish economy. The agreement was reached when the first effects of the crisis touched Spain. Since then, the tripartite social dialogue between the government and social partners has been in decline and discontinuous. The interest of the government in social pacting has been very sporadic, being reduced even more as the pressure of the communitarian institutions and the conflict with the trade unions 7

8 increased. The principal reforms of the labour market and the structure of the collective negotiation of the period have been approved unilaterally by the government by law. The Labour Reform of 2012 was approved without even having activated a process of previous consultation with the social partners (Molina and Miguélez, 2013). Most of the initiatives of tripartite social dialogue started between 2010 and 2013 have been aborted before reaching an agreement. The socialist government, in power until November 2012 showed increasing impatience with the slowness of the social dialogue. The last relevant result of the tripartite social dialogue throughout the period was the Social and Economic Agreement for growth, unemployment and the guarantee of pensions, reached at the beginning of 2011, with important mutual concessions by all sides. The entrance of the new conservative government with an absolute majority at the end of 2012 has meant the abandonment of the tripartite social pacts. The political decision making in the period has been characterized by the «virtual inexistence of three way social dialogue» (CES, 2013: 355) and the intensive use of urgent unilateral regulation to pass the agenda of reforms on the labour market and cutbacks in the expenditure on welfare with objectives of fiscal consolidation. The slight improvement of the general conditions of the Spanish economy throughout 2013 has permitted a small reactivation of the relation between the government and the trade unions. Conversations have taken place in matters of youth entrepreneurship and unemployment and pensions. Nevertheless, these contacts have not exceeded the level of the previous consultations (González Begega and Luque Balbona, article in press). The bipartite and autonomous dialogue between the social partners has shown a greater degree of resistance. «There is a sharp contrast between developments in tripartite and bipartite negotiations. While austerity policies have brought tripartite bargaining to a crisis as a result of a lack of consensus on some critical aspects and, more recently, by the abandonment of negotiations by the government, bipartite social dialogue continues to play an important role ( )» (Molina and Miguélez, 2013: 26). The signing and renewal of the Inter-confederal Agreements for Employment and Collective bargaining in 2010 and 2012 (AENC), after a series of initial difficulties, demonstrates that the orientation towards consensus of the social partners has been greater than that of the government, at least in the area of collective negotiation. Social dialogue has not played an important part in the design of the policies of fiscal adjustment and only indirectly in those of reform of the labour market and the structure of collective negotiation. Nevertheless, the capacity of indirect influence is an element to be considered. The social dialogue has not been abandoned in spite of the formal paralysis that affects its tripartite dimension (Medina Iborra, Molins, Navarro Gómez, 2013). Table 2 shows the agreements and main aborted processes of social dialogue in the economic crisis. Table 2. Social dialogue and unilateral reform in Spain ( ) Date Government Negotiation / Agreement Type 07/2008 PSOE (minority) Memorandum of Understanding for the recovery of the economy, employment, competitiveness and social progress 09/2009 PSOE (minority) Agreement between the government and the trade unions for the public sector ( ) 11/2009 PSOE (minority) Agreement on the collective bargaining process pending in /2009 PSOE (minority) Urgent measures on the maintenance and promotion of employment and the protection of the unemployed 8 Tripartite agreement (government and social partners) Bipartite agreement (government and trade unions) Bipartite agreement (social partners) Tripartite negotiation aborted

9 01/2010 PSOE (minority) Inter-confederal agreement on employment and collective bargaining. AENC I ( ) 06/2010 PSOE (minority) Austerity Plan for the public sector ( ) Bipartite agreement (social partners) No consultation or negotiation 06/2010 PSOE (minority) Reform of the labour market Tripartite negotiation aborted. Unilateral reform 01/2011 PSOE (minority) Social and Economic Agreement for growth, employment and guaranteed pensions Tripartite agreement (government and social partners) 06/2011 PSOE (minority) Reform of collective bargaining Tripartite negotiation aborted. Unilateral reform 01/2012 PP (mayority) Inter-confederal Agreement on employment and collective bargaining. AENC II ( ) 02/2012 PP (mayority) Agreement on the autonomous resolution of industrial conflicts (V ASAC) Bipartite agreement (social partners) Bipartite agreement (social partners) 02/2012 PP (mayority) Reform of the labour market No consultation or negotiation 12/2013 PP (mayority) Reform of the pension system Informal consultation with social partners. Unilateral reform 06/2013 PP (mayority) Strategy on youth employment and entrepreneurship ( ) Source: Authors (base don CES, ). Agreements in shade. Preliminar tripartite consultation In combination with the negotiations, the trade unions have begun a strategy of confrontation, oriented towards demanding the government activate the social dialogue in those processes of the agenda of reforms which have been decided unilaterally. The conflict has taken place around the two reforms of the labour market, the modifications of the structure of collective negotiation and the cutbacks in social expenditure. The combination of the dynamics of boxing and dancing with the governments has been shared by both majority unions, CCOO and UGT. There have been no cracks in the political strategy of either. The will to dialogue of the stakeholders at the beginning of the crisis has been replaced by increasing tension, intense in the period The trade unions have called three general strikes. The first against the labour reform decided unilaterally by the socialist government in November of The following two strikes were called against the conservative government of the Popular Party in 2012, protesting against the second labour reform of the period and the plan of cutbacks of public expenditure. Table 3 shows the data on the motivation and support of these general strikes. 2 2 The first great conflict of the period was a general strike of the public sector, called by CCOO, UGT and the Civil Servant unions on the 18/06/2010 against the Plan of Austerity for the Public Sector ( ). 9

10 Tabla 3. Motivation and support of the general strikes in Spain ( ) Date Government Motivation Participants (1000) Wage earners (annual average, thousands) 29/09/2010 PSOE Labour reform /03/2012 PP Labour reform /11/2012 PP Fiscal consolidation and social expenditure cutbacks Source: authors. CIS polls number 2847; 2941; y , ,8 14, , ,2 23, , ,2 21,0 Support (percentage) The economic conflict or that of labour motivation has not been as intense as the political conflict, which must be understood as a form of «negative political exchange» (Luque, 2012). Workers' strikes show an inverse tendency to that of political strikes, having been more intense at the start of the crisis (González Begega and Luque Balbona, article in press). However, the main element of identity of the conflict within the economic crisis in Spain is the exploration by the trade unions of new repertoires of protest, in coordination with the new civilian organizations, like the Movement 15-M or Citizens' Demonstrations (Antón, 2011). The unions have combined conventional strategies of conflict with other forms of response. The calendar of mobilization of the trade unions has been very intense. The unions have become the main promoters of demonstrations and concentrations in public areas since 2012 (Köhler, González Begega and Luque Balbona, 2013). Portugal. European bail-out and social unrest The economic crisis has had an inferior impact on Portugal than on Spain in terms of employment but superior in financial aspects. The communitarian authorities audited the Portuguese public finances in May 2011 and imposed a harsh programme of adjustments in economic matters. Public decision making in Portugal has been conditioned by the political requirements of the European bail-out. The margin of manoeuvre of Portuguese governments has been less than that of their Spanish counterparts. The sequence of the crisis in Portugal adapts to the calendar of the bail-out. The request for communitarian aid, in April 2011, in the case of Portugal, divides the two phases of reaction in the face of the economic crisis. The first political response to the crisis is marked by the application of three plans of Stability and Growth (PEC) from March The measures decided by the parliament introduced strong cutbacks to public expenditure. The rejection of the fourth PEC, the fall from the government of the Socialist Party (PS) and the request for European bail-out in March 2011, open a second period marked by strict subordination in public decision making (Bretones, 2013). The bail-out in Portugal brings a scenario of imperative policies different to those in Spain. The new conservative coalition government of PSD-CDS, who came to power in June 2011, has rigorously applied the European adjustment directives. (Costa, 2012). The bail-out has distorted the political exchange between the government and the social partners in Portugal. The impossibility to negotiate the content of the agenda of reforms has limited the functionality of social pacting, that has only served to provide legitimacy. Before the 10

11 financial aid was requested, the social dialogue offers some parallelisms with the Spanish case, due to the appearance of a dynamic of «boxing and dancing» (Campos and Martín Artiles, 2011). Nevertheless, from 2011 the relation between the government and trade unions is established in different terms, partly due to the bail-out itself but also because of the absence of a strategy of united action between the two main Portuguese trade unions, CGTP and UGT- P. The Portuguese unions have moved between the belligerent position of the largest union CGTP and the predisposition to pact of UGT-P. The reform of the Code of Work in June 2012 demonstrated the distancing of positions between both unions. UGT-P participated in the tripartite agreement with the government and management that this reform sustained. CGTP did not take part in the dialogue process and called a general strike against the reform (Monteiro Fernandes, 2013). In spite of the incomplete character of the union support, the commitment of UGT-P towards the government's agenda of reforms introduces a difference with the Spanish case. On the contrary, the government has not looked for union support in the different adjustments introduced between in the pension system, whose last great structural reform took place in 2007 (Eiro, 2013). Table 4 shows the principal social pacts and interrupted processes of dialogue during the economic crisis. Table 4. Social dialogue and unilateral reform in Portugal ( ) Date Government Negotiation / Agreement Type 06/2008 PS (minority) 03/2010 PS (minority) 05/2010 PS (minority) 09/2010 PS (minority) 10/2010 PS (minority) 03/2011 PS (minority) 01/2012 PSD-CDS (coalition) 10/2012 PSD-CDS (coalition) Tripartite Agreement for a new system of regulation of industrial relations, employment policies and social protection in Portugal Growth and Stability Programme (PEC I) Growth and Stability Programme (PEC II) Growth and Stability Programme (PEC III) Measures on employment promotion Tripartite Agreement for competitiveness and employment Agreement on growth, competitiveness and employment (supports the reform of the Labour Code) Measures of adjustment of unemployment benefits and on the raising of retirement age Source: Authors (based on Eironline). Agreements in shade. Tripartite agreement (government and social partners UGT-P) No consultation or negociatiation No consultation or negotiation No consultation or negotiation Tripartite negotiation aborted Tripartite agreement (government and social partners UGT-P) Tripartite agreement (government and social partners UGT-P) Tripartite negotiation aborted 11

12 The absence of union unity makes the calendar of protests in Portugal more complex. In addition, it is also more difficult to measure its impact given the absence of statistics on the number of working days lost due to strikes since The conflict between government and trade unions has been marked by the constant belligerence of CGTP and the strategic instability of UGT-P (Protàsio, 2013). Like in Spain, after a first stage of social peace there has been an increase of political conflict since The Portuguese trade unions have called a total of five general strikes in the period , three of which have been called jointly by both majority unions. The economic crisis has modified the traditional model of management of the dynamics of agreement and conflict of UGT-P with the government. The strategic alliance between two strongly competitive trade unions after the first general strike of the period, later broken and then restored in 2013 after a change of Secretary General in UGT-P, constitutes a novelty within the union relations in Portugal (Campos Lima and Martín Artiles, 2011). UGT-P has moved between the optimistic acceptance of the political scenario defined by the bail-out and the wear and tear which it has suffered by supporting the government's adjustment measures (Bretones, 2013). Table 5 shows the basic details of the five general strikes. 3 There is no trustworthy data on the support of the strikes. Table 5. Motivation and organizers of the general strikes in Portugal ( ) Date Motivation Organizer(s) 24/11/2010 Proposal of State budget for 2011 CGTP y UGT 24/11/2011 Proposal of State budget for 2012 CGTP y UGT 22/03/2012 Against the reform of the Labour Code CGTP 14/11/2012 Proposal of State budget for 2013 CGTP 27/06/2013 Against the austerity package of the government with additional adjusting measures Source: authors. CGTP y UGT There is no data on the behaviour of the economic conflict or labour motivation. However, there have been multiple sectorial strikes since 2010 (Centre of Social Studies, 2013). The Portuguese trade unions, above all CGTP, have also explored a novel repertoire of protests, in collaboration with civil organizations (Costa, 2012). The demonstrations by Portuguese citizens against the adjustment policies have revolved around the Geraçao a Rasca movement or the more transversal Fuck the Troika, similar in character to the Spanish Citizen Movements (Baumgarte, 2013). The demonstrations have put pressure on UGT-P and have opened some cracks in the conservative coalition government. In 2013, in addition, the government has met with opposition from the Portuguese Constitutional Court who have invalidated some of the most important adjustment measures of the State budget for The response of the public and the trade unions, the problems of constitutional validity of the adjustment measures and the relaxation of the conditions of the financial bail-out since the spring of 2013 have opened up a new scenario. What is more, the Portuguese economy grew again in After a midyear government crisis, the president of the government carried out a series of calls to the relaunching of social dialogue, offering an increase of the interprofessional minimum wage in order to approach the trade unions. President Passos Coelho has publicly declared his will to reactivate the social dialogue in 2014 (Cavaleiro, 2013). Conclusions 3 As in the case of Spain, the first great conflict of the period was a general strike of the public sector, called jointly by CGTP and UGT-P on 04/03/2010 against the PEC I. 12

13 The deterioration of the relations between the government and the social partners has lead neither Spain nor Portugal to a complete rupture of the dynamics of social pacting. The confrontation of «trade unions against governments» in the context of the economic crisis does not mean the definitive abandonment of social dialogue as a political tool but rather an attempt to reactivate it. None of the stakeholders have openly denounced it. The conflict must be interpreted as a negative expression of the political exchange and not as a deactivation of it (Hamann, Johnston and Kelly, 2013). In addition, the system of social pacting has continued to produce results even at the moments of most intense conflict reached in Although these results are discreet, the dynamics of social pacting has shown an underlying continuity (González Begega and Luque Balbona, article in press). The preference of the governments for reforms of unilateral design has opened a peculiar dynamics of «boxing and dancing with the trade unions» in which short-term social pacts are combined with conflict (Huzzard, 2004). Evidently, the political balances between governments and social partners have been reconfigured as a result of the crisis, as anticipated by some authors in its outset (Hyman and Grumbell-McCormick, 2010). But the relations have not been broken and the trade unions have not been reduced to simple minor political stakeholders either (Culpepper and Regan, 2014). Their means to power do not rest solely on institutionalization but also on their capacity, among other factors, to manage the conflict (Behrens, Hamann and Hurd, 2004). The phases of social dialogue within the economic crisis in Spain and Portugal show parallelisms. In both countries, an effort of consensus is identifiable which remains until 2010 and that is replaced by a scenario of greater confrontation that reaches its height of conflict in Equally, as of 2013, the political conflict expressed in general strikes is reduced. The lesser intensity of the conflict from the second half of 2013 is due to the detection of a possible risk of overuse of this instrument of protest by the trade unions and to a change of interest by the governments towards social dialogue in the context of improvement of the economic situation. In any case, the pacts have not been reactivated. The main differences between the Spanish case and the Portuguese must be looked for in the political context of the economic crisis and in the stability and preferences of the stakeholders. The monitoring by the communitarian institutions introduces a new explanatory factor to consider in the predisposition of the governments towards the dialogue with the social partners. The bail-outs have affected the functionality of the social pacts and the incentives of the governments to activate them have been reduced. The intervention of the communitarian institutions has undermined one of the requirements on which the corporatist political exchange is based: national sovereignty (Avdagic, 2010). But although the conditioning of public policies has been greater in Portugal than in Spain, the Portuguese governments have made more use of the tripartite social dialogue, probably because the stability of the coalition government PSD- CDS in Portugal has been less than that of the Spanish PP, supported by an absolute majority. Another reason is that the Portuguese governments have found an interlocutor in one of the two main trade unions of the country, although its commitment has been irregular and discontinuous. The nonexistence of a stable frame of united trade union action in Portugal and the strategy of UGT-P are elements that differentiate the experience of social dialogue in the crisis in both countries. The inter-union equilibrium in Spain and Portugal has historically been different. This fact is fundamental to explain the preferences of the Spanish and Portuguese trade unions in the context of the crisis and the different combination of boxing and dancing strategies. Bibliografía Alonso, L.E Macro y micro-corporatismo. Las nuevas estrategias de la concertación social. Revista Internacional de Sociología, 8/9: Antón, A Resistencias frente a la crisis. De la huelga general del 29-S al Movimiento 15- M. Valencia: Germania. 13

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