DSLW Working paper 2 - Studi del lavoro

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DSLW Working paper 2 - Studi del lavoro

D s

LW

Dipartimento di Studi

del Lavoro e del Welfare

UNIVERSITÀ DEGLI STUDI DI MILANO

The Emergence and Evolution

of Social Pacts in Italy

WORKING PAPER

Sabrina Colombo and Marino Regini

DIPARTIMENTO DI STUDI DEL LAVORO E DEL WELFARE

Via Conservatorio, 7 – 20122 Milano

Tel. +39.02.503.21163/4/6/8 Fax +39.02

E-MAIL: dsl@unimi.it

2/2009


The Emergence and Evolution of Social Pacts in Italy *

Sabrina Colombo and Marino Regini – University of Milan

Abstract

DSLW WP 2/2009

The aim of this paper is to show the factors that affected the emergence and the evolution

of concertation in Italy. The paper consists of two parts. In the first part the focus is mainly

on actors’ strategies that lead them to signing social pacts. The paper describes the social

pacts emergence, taking into account not only the political and economic situation at the

time of a pact’s signature, but also the features of the actors involved and the interactions

between them, before, during and after the negotiation. In the second part the paper

analyses the evolution of social pacts by focusing on the mechanisms of

institutionalisation. By mechanisms of institutionalisation we mean the processes that lead

to a stable and recurrent concertation as a policy–making device. More specifically, we

mean the ability of social pacts to serve socio-economic needs, to produce satisfactory

outcomes for the actors and to create inter- and intra- organisational ties and networks. In

this section the paper then describes the main outcomes generated by the tripartite

agreements: on the one hand, we consider objective indicators of socio-economic

performance throughout the period in which these agreements have produced effects; on

the other, we examine the institutional outcomes, namely the degree of structuring and

coordination in intra- and inter-organizational relations. Finally we consider the role of

governments in concertation. In spite of the success that social pacts in Italy had in the

1990s, it is still not clear to what extent actors are willing to regard concertation as a now

institutionalized fact, one not to be called into question whenever the economic situation or

power relations change. Despite the importance of developments in the 1990s,

relationships between employers, unions and the state in Italy are still a long way from

reaching a shared view of national competitiveness which gives rise to a joint effort for the

full development of the economy and of human resources.

* This paper is the Italian country-report of the research project ‘New modes of

governance. The Emergence and Evolution of Social Pacts’. It is a project co-funded by

the European Commission within the Sixth Framework Programme (2002-2006) and

coordinated by Sabina Avdagic (University of Sussex), Martin Rhodes (University of

Denver) and Jelle Visser (University of Amsterdam). It is a preliminary draft. A revised

version will be published in a book titled “Social Pacts in Europe: Emergence, Evolution

and Institutionalization”.

DSLW Working Papers are available at http://www.dsl.unimi.it/dslwtemp/ita/index.php

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1. Introduction

DSLW WP 2/2009

This chapter aims to examine the main tripartite agreements signed at national level since

the end of the 1970s. Prior to that date, the conditions did not exist in Italy for concertation

to be feasible.

Although, in fact, Italy’s economic situation in the mid- and late-1960s– with a worrying

increase in inflation – required intervention in incomes policy, the social partners had not

developed structures and strategies suitable for a process of tripartite negotiation.

On the one hand, until the mid-1970s the government was able to curb inflation by means

of unilateral monetary and fiscal measures. On the other, during the 1960s, the trade-union

confederations had little desire, nor had they ability, to build consensus on wage restraint,

not least because of their low levels of workplace representation. Although from the first

half of the 1970s onwards the unions were able to increase their memberships, their

strategy of action was still to exert external influence on decision-making processes by

means of collective mobilization. As we shall see, it was only at the end of the 1970s that

the conditions arose for concerted agreements on economic policy to become possible.

The analysis that follows will therefore deal with laws negotiated between the government

and the social partners in the period 1977-79. Then discussed will be social pacts

concluded subsequently to that initial period of concertation, namely: the agreement of

1983 and its continuation in the partly failed pact of 1984; the agreement of July 1992 and

its continuation in the agreement of July 1993 (considered a turning point in the process of

institutionalization of Italian industrial relations); the reform of the pensions system

negotiated with the social partners in May 1995; the ‘Pact for Employment’ of September

1996; the ‘Christmas Pact’ of 1998; the ‘Pact for Italy’ of July 2002 and the “Pact for

welfare” of 2007 (see Table 1, Annexes). The 1990s clearly stand out as the peak period of

social pacting in Italy, preceded by a long phase of difficult concertation and followed by

an equally long period in which social pacts were either openly called into question or

turned into purely political instruments of consensus among the social partners, divisions

within them, legitimation of government action and policies.

As we will show, social pacts in Italy were reached in situations featuring:

a) rather poor economic conditions: high inflation and state deficit up to 1993, high

unemployment and declining competitiveness afterwards; a feeling of national

economic emergency, however, was stronger and more widely shared during

negotiations leading to the 1992 and the 1993 pacts;

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DSLW WP 2/2009

b) weak governments: either unstable coalitions or technocratic, i.e. non-electorally

legitimated, cabinets; the exceptions being the 1983-4 and the 2002 pacts, which,

however, were not signed by the major trade union confederation;

c) intermediate union centralization and moderately strong unions: actually, centralization

(and insulation from rank-and-file pressures) was rather high up to 1993, while since

then unitary works councils were established, decentralized bargaining was given an

official role and consultations or referenda on pacts were often used; also, union

density steadily declined from 49% in 1977 to 33 % in 2005, but unions have remained

moderately strong in comparative perspective.

The data used to analyse the origin and evolution of social pacts have been drawn from

various sources. As well as a few interviews with the main actors involved in the

negotiations on these pacts 1 , the information sources used were the following:

- articles published, in the various periods considered, by newspapers and periodicals

which devote substantial space to industrial relations;

- the reconstructions of events and research findings in publications by the best-known

experts on industrial relations;

- data collected by the main national statistical offices.

The chapter consists of two parts. The first will outline the most significant aspects

concerning the emergence of the social pacts considered (the structural drivers of change

and the negotiation process); the second will analyse their evolution, and in particular their

degree of institutionalisation focusing on the most relevant mechanisms and paths. A short

conclusion will follow.

2. The Emergence of Social Pacts

2.1 Drivers of pacts in different periods

As highlighted in the introduction, in Italy concertation started at the end of ‘70s. The first

experiences (bargained laws in the late 1970s and the 1983-1984 tripartite pacts) were

driven by three structural factors: economic crisis, weak governments and social partners’

1 Int. 1: Stefano Patriarca - Cgil; Int.2: Beniamino Lapadula - Cgil; Int. 3: Stefano Parisi - Confindustria; Int.

4: Paolo Reboani - Government (Ministry of Labour).

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fragmentation. Interest organisations were characterized by rather high centralization,

proximity to political parties and internal divisions.

Between the mid-1970s and the 1980s the economic crisis in Italy generated high rates of

inflation and rising unemployment (see Table 2, Annexes). Italy’s entry into the European

Monetary System and inflationary pressures obliged governments to adopt measures

contrary to those which it had imposed unilaterally (monetary and fiscal policies) in

previous years (Salvati, 2001). It became increasingly necessary to negotiate economic

policy measures – as regards incomes policy especially – with the social partners.

Until the end of 1970s Italian governments were formed by unstable majorities consisting

mainly of ‘centre-left-oriented’ party coalitions with strong affiliations to the unions. In the

early 1980s the political situation changed and there ensued a phase of much more stable

and powerful coalition government. This also changed the context for concertation.

Tripartite negotiation was advocated by the stronger and more stable governments and by

Cisl and Uil. Opinions differed among the three unions, especially because of their diverse

affiliations with the political parties. The main factors responsible for internal tensions,

however, were the egalitarian wage strategy pursued by the three largest union

confederations, and the lack of formal and clear rules on firm-level workers’

representation.

Besides the so-called ‘rally of the forty thousand’ 2 , the main reaction against the egalitarian

line of the union confederations arose in the public sector, whereas in the private sector the

effect of egalitarian wage increases was partially off-set by bonuses and premia for skilled

workers. At the end of the 1970s several so-called ‘autonomous unions’ were formed in the

air transport, banking, insurance, health care and school sectors, largely as a response to

the three confederations’ egalitarian strategy. During the 1980s this rank-and-file

movement became more stable, giving rise to new confederations 3 (Baccaro and Locke,

1998).

The other factor responsible for tensions internally to the unions was the lack of proper

mechanisms linking the grass-roots level with that of the national confederations. In 1970

the Workers’ Statute established a new form of workplace union representation (RSA), but

it did not lay down rules on the election of delegates and their competences. A

complementary form of representation, the ‘Factory Councils’ (Consigli di fabbrica),

2

A demonstration by middle managers and white collars in 1980 in protest against the strategies pursued by

the union confederations.

3

Cisal, Cisas, Confail, Confisas, the most important of which was the radical Cobas (Comitati di base)

established by previous members of Cgil.

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DSLW WP 2/2009

appeared at the beginning of the 1970s and became the most widespread form of

workplace representation until the early 1990s. The factory councils consisted of both

union members and non-members elected by the workforce. The ‘federative pact’ signed

by the three union confederations in 1972 recognized the factory councils as workplace-

based institutions representing both workers and unions, but it did not change the lack of

coordination between the central and the plant levels. In the mid-‘80s union density started

to decline (see Table 4, Annexes)

Also the largest employers’ association (Confindustria) was internally fragmented during

the 1970s and 1980s. Although its actions and strategies were formally highly centralized,

difficulties of coordination arose at the local and individual firm levels. The industrial

relations strategy of Confindustria was conditioned by the difficulty of defining common

positions. The 1970s saw a significant decrease in associational density: while there was an

increase in Confindustria membership among firms with more than 100 employees, small

firms (especially the smallest) left the confederation in large numbers (Maraffi, 1994).

In the early 1990s, Italy’s economic situation was characterized by: high rates of

unemployment; high real wages unmatched by parallel increases in productivity; public

spending and public debt grown out of hand; and difficulties met by Italian on international

markets. In 1991 exports declined by 2.1 percent (Mascini, 2000; see also Table 2,

Annexes). In February 1992 was signed in Maastricht the European treaty which increased

the pressure on Italy to reduce its public deficit and inflation rate. This economic

emergency lasted until March 1998, when the European Commission officially announced

that Italy had fulfilled the conditions necessary for adoption of the single currency (Lavoro

e informazione, 1998).

In the same period, the political system grew increasingly unstable and a series of so-called

‘technocratic’ governments were installed when several political and economic leaders

were indicted for corruption as a result of Mani Pulite (Clean Hands) investigations. The

‘technocratic’ governments did not have a parliamentary base and consequently needed the

social partners not only to tackle the economic crisis but also to gain legitimation. These

governments negotiated two of the most important social pacts (Pacts of July 1992 and

1993).

The political situation changed in 1994 with the first elections held on the basis of the new

electoral system. The elections were won by a centre-right coalition, and the businessman

Silvio Berlusconi took over as prime minister. The Berlusconi government was unstable

and fragmented: there was little in common among the parties making up the government

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coalition, which moreover did not have a majority in the Senate. Berlusconi tried to

implement unilaterally some economic policies, but due to the weak majority and the

social conflict generated by the government intentions, he resigned on December. There

was another technocratic government with Lamberto Dini as prime minister. This

government negotiated with social partners the pension reform.

The elections of April 1996 were won by a centre-left coalition headed by Romano Prodi,

with a weak parliamentary majority because it depended on the support of the Communist

Reconstruction Party in the Chamber of Deputies. The government sought the dialogue

with the social partners and they signed in September 1996 the “Pact for Empolyment” in

order to face both the economic emergency (high unemployment and Maastricht

parameters) and the parliamentary weakness.

However, in September 1998 the leader of the Communist Reconstruction Party harshly

criticised the budget law enacted by the government, and in October parliament voted a

motion of no confidence in Prodi. The new centre-left government was headed by

Massimo D’Alema. The government was weak, but the end of the Maastricht pressure–

given that Italy, as we said, fulfilled the parameters – influenced the new social pact (the

so-called “Christmas pact”), a largely symbolic pact, without relevant reforms but only

commitments towards the continuation of social dialogue.

Thus the political and economic situation during the 1990s was not different from the

1980s, but the social partners started a period of stronger organisational unity. In the case

of the unions, the gap between the national level and the firm level had continued to widen

(difficulty of maintaining control over firm-level bargaining, which increasingly less

performed its role of supplementing the national level). But also Confindustria needed to

control the outcomes of the various negotiating levels in order to prevent excessive

fragmentation of business strategies from harming the competitiveness of Italian firms. The

Pact of July 1993 was a turning point for social partners' organisational unity .

Following the 1993 pact, the unions and the employers’ associations signed a bilateral

agreement on works’ councils (RSU) in December 1993, and then in early 1994 for the

public sector. The structure and action of the RSU thus acquired greater formalization and

coherence. The 1994 RSU elections demonstrated that the relationship between the union

confederations and the rank-and-file had been revitalized: the former obtained the large

majority of votes and representatives, many of whom had no previous experience as union

delegates (in Milan, around 5000 inexperienced delegates were elected) (Regalia and

Regini, 1998; see also Table 5, Annexes).

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DSLW WP 2/2009

Discussion now resumed on trade-union unity. Threatening trade-union unity were

divergences among the confederations on their relationships with the political parties 4 . The

majoritarian electoral system had given rise to new coalitions, and there was seeming

rapprochement between Cgil and the centre-left parties. However, the three confederal

secretaries approved a document which set out the principles on which trade-union

autonomy should be based, citing the July 1993 agreement as the framework (Mascini,

2000). In May 1997, Cgil approved a document which proposed the creation of an unitary

trade union. The proposal was accepted by Cisl as well (Molina Romo, 2004) 5 .

Tension and fragmentation decreased among the employers’ associations as well.

Confindustria was involved in the corruption scandal “ Mani pulite” and this, as we will

see, weakened its negotiation power. Confindustria lacked political support: it was by now

alienated from all the parties. It was not that Confindustria desired to operate

independently of the dynamics of the parties and the government coalitions (unlike the

trade unions); rather, its stance was taken up in protest against the inability of the four- and

five-party governments to deal with the country’s economic difficulties 6 . But later in the

‘90s some organisational changes reduced internal fragmentation. Privatisation of several

state-owned enterprises led to the merger with Confindustria of the Intersind and ASAP

associations, and hence to the internalization of divergent positions among employers.

After the 1993 agreement, the aims pursued by the new ‘Grande Confindustria’ were those

of coordinating and harmonizing the action of the industry federations. On the one hand,

the central offices were strengthened; on the other, Confindustria increased its

independence from the political parties (Regalia and Regini, 1998).

In the 2000s the two social pacts signed were driven by another economic emergency. The

political landscape was quite stable from 2001 to the beginning of 2006, while it became

unstable after the 2006 elections. Social partners were still internally integrated, but unity

between unions turned out to be more unstable.

4 In the early 1990s, Cgil embarked on a reform process driven by its charismatic general secretary Bruno

Trentin and dissolved its Communist faction, also in light of the fact that the Communist Party too was going

through a period of organizational and ideological revision. Following the corruption scandals, Christian

Democracy – the party closest to Cisl – disappeared from the political scene.

5 The confederations then undertook to draw up a unitary statute in 1998, to distribute the membership cards

for the new single union in 1999, and to hold the first unitary congress in 2000 (Molina Romo 2004).

6 Confindustria proposed a set of thoroughgoing institutional reforms and also supported referendums on the

electoral system (which led to a majoritarian system with a quota of proportional representation) and the

public funding of the political parties.

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DSLW WP 2/2009

As regards the economic scenario, the Italian economy started a new period of crisis. After

2001 it was affected by the crisis of the international financial markets and by the

exacerbation of geopolitical tensions. Data show (see Table 2, Annexes) that, from 2001 to

2007, the Italian GDP growth was quite low compared to the European average growth

which was around 3%. The competitiveness of Italian firms was marked by a limited

growth in export volume (a fall in exports for which appreciation of the euro was largely

responsible). Employment continued to grow very slowly and its growth rate was below

the European average. In 2006 there were relatively positive values of these three

indicators. But still they were well below, not only the European average, but also the

levels registered in previous years that were signed by strong economic growth.

The political situation changed as well. After the regional elections of 2000, the prime

minister of the centre-left coalition (Massimo D’Alema) tendered his resignation. It was

yet another technocratic government headed by Giuliano Amato that took the country to

the general elections of 2001, which were won by the centre-right coalition. Silvio

Berlusconi became the new prime minister. The government had a strong parliamentary

majority. To adopt the labour market reform proposed by the Ministry of Labour, a new

social pact was signed in July 2002 without the CGIL confederation.

In fact, the distinctive feature of this period was the breakdown of union unity. From 1999

onwards, divisions among the three union confederations widened, and the difficulty of

achieving union unity increased until the ‘breakdown’ of the early 2000s. Cgil’s strategies

diverged from those of the other two confederations. In 2004 the uions held again a unitary

position against the Berlusconi government’s socio-economic reforms, concerning mainly

the labour market and pensions. In March 2004, for the first time in ten years, the unions

gathered in an unitary assembly of six thousand delegates. The assembly approved a

document on economic, social and incomes policies (Eironline, 2004).

The 2006 general elections were won by a centre-left coalition. The new government,

headed by Romano Prodi, was based on a very narrow parliamentary majority. It showed

immediately to be in favour of dialogue with the social partners and it highlighted the

importance of industrial relations to revive the Italian economy. Among the elements that

typified this vision of policy making we can quote the fact that the Ministry of Labour and

the two chambers of parliament were chaired by former trade unionists. A new social pact

was signed in July 2007.

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DSLW WP 2/2009

During this period, the social partners were able to maintain a moderate internal unity.

However, with the resumption of an attitude more oriented to dialogue (also because of the

new centre-left government), the most radical factions of Cgil held an adversarial logic. In

the 2006 Centenary Celebration Congress, the internal differences about strategies to be

pursued were discussed again. Some industry federations (including FIOM) participated in

the demonstration held by the radical left in November 2006 (Eironline, 2007).

2.2 Negotiation process and actor preferences

In this section we will describe the emergence of social pacts focusing on actors’

interactions and preferences before, during and after negotiations. We will highlight not

only events and interactions that led to the signature, but also actors’ strategies, stemming

from their relative power and their perception of it, but also from the actors’ perception of

their interdependence.

2.2.1 Bargained laws in the late 1970s and the 1983-1984 tripartite pacts

Despite their internal tensions, after the mid-1970s the social partners began to consider

concertation as a means to overcome the economic crisis, although they regarded it as a

second-best solution. In fact, by the mid 1970s unions concentrated their action at the

central level in order to tackle high unemployment and a high rate of inflation 7 (Regalia

and Regini, 1998). For traditionally adversarial unions, it was difficult to imagine a radical

shift toward cooperation. But they also realized that further improvements in wages and

working conditions could hardly be achieved via collective bargaining, despite their high

mobilization power. Employers as well found increasingly difficult to transfer higher

labour costs onto price increases and accepted union participation in economic policy in

order to avert union opposition (ibid.). The economic situation and actors’ perception of

interdependence increased then the propensity toward agreements on the main socio-

economics issues.

The ’national solidarity’ government supported the policy of wage moderation and unions’

strategies shifted from conflict to cooperation (the 1978 so-called ‘Eur turning point’). In

exchange for their cooperation, the unions expected to be given a more prominent role in

national policy-making. The Communist Party exerted strong pressure on the unions to

7 However, union action continued at plant level as well: over 32,000 factory councils (corresponding to

about 206,000 delegates) represented around 5 million workers in the early 1980s (Regalia and Regini,

1998).

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DSLW WP 2/2009

show wage moderation during collective bargaining. Yet the unions came to consider wage

moderation the best strategy anyway, given the political and economic conditions of the

time (Molina Romo, 2004).

During this period a number of laws concerning the reduction of labour costs were

negotiated with the social partners. Other ‘bargained laws’ were enacted to lower

unemployment and to support employment (see Table 1, Annexes). The unions committed

themselves to moderate plant-level mobilization 8 , while the government pledged to support

employment rather than focus on cutting labour costs.

This trade-off, however, was not enough to reduce inflation to any marked extent. On the

one hand, despite the ‘Eur turning point’, the unions felt they could not accept measures

that would radically contradict their past claims. On the other hand, governments were not

powerful enough to ‘impose’ drastic measures on the unions, given that they were unstable

and supported by a parliamentary majority in which parties traditionally linked with unions

predominated (Salvati, 2001).

In 1983 a tripartite agreement (the so-called ‘Lodo Scotti’) was signed by all three union

confederations, Confindustria and the government (see Table 1, Annexes). The CGIL

signed the agreement reluctantly in order to maintain trade-union unity of action, and only

after the government had threatened that it would act unilaterally. The employers and

unions obtained a few concessions in the deal: the employers a certain amount of relief on

social security contributions; the unions some family income support measures (Mascini,

2000).

In 1984, the government proposed a new tripartite agreement, on the grounds that the

‘Lodo Scotti’ had proved ineffective in combating inflation, and asked the unions to make

further concessions. The government’s proposals were set out in a decree, and they

exacerbated disputes among the unions on the interests to be pursued via negotiation. The

Communist majority faction in the Cgil, and the Communist Party itself, opposed an

agreement that would have yielded only concessions from the unions and scant advantages

to them. Hence, whilst Cisl and Uil found the government’s decree acceptable, Cgil

refused to sign the agreement. Nonetheless, the government went ahead and enacted a

decree which contained all of the agreement’s clauses. This partially failed social pact (the

‘San Valentino Pact’) was the first to introduce greater flexibility (part-time contracts and

8 In fact from the second half of the 1970s onwards conflict in the private sector tended to diminish, while in

the public sector it increased (Regalia and Regini, 1998).

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contratti di formazione lavoro - training contracts for young people) in the Italian labour

market.

The unions’ internal tensions provoked mobilization by factory councils in Northern Italy

during negotiations on the pact. The so-called ‘autoconvocati’ (shop stewards not

supported by official unions) protested against the wage restraint policy adopted by the

confederal unions (Baccaro, 2001). This was in spite of the positive outcome of a

referendum held among workers after the signature of the tripartite agreement of 1983 and

in which 69% of 4.1 million workers voted in favour of the confederal strategy.

The parties signed the agreements relatively rapidly under pressure applied by the

government and because they perceived that their bargaining power had diminished.

Mutually at odds on the one hand, and internally fragmented on the other, the

confederations had insufficient power to carry the negotiations forward and direct them

towards gains more concrete than those already negotiated. For unions, the lack of

coordination between the two levels weakened the central action because they could not

use their mobilization power to make pressure during the negotiation.

2.2.2 Pact of July 1992

Throughout the late 1980s and early 1990s, despite the halt in concertation after 1984,

bipartite negotiation kept dialogue between the social parties alive.

In June 1989, an agreement was signed which postponed cancellation of the scala mobile

for a year and acted as the framework for negotiations on firms’ competitiveness (Mascini,

2000). In January 1990, another agreement was reached under which the unions undertook

to cooperate with firms in exchange for their recognition in workplaces. Nevertheless,

forceful measures to curb labour costs were not introduced. Confindustria only signed

under pressure from the government, which promised to intervene in labour costs by

subsidising social security contributions

Negotiations continued on the cost of labour and the bargaining structure. In July 1990 a

new tripartite agreement provided that official negotiations on reform of the wage

structure, bargaining system, and the pay-indexation mechanism would begin in June 1991.

The social partners nevertheless failed to reach agreement on these issues and explicitly

requested mediation by the government. However, given that negotiations were still

ongoing on the main sectoral collective agreements, it was decided that talks should

resume after the spring of 1992 (Negrelli, 2000).

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Negotiations did in fact resume in June 1992. In our interviews, the union leaders involved

in such negotiations highlighted the difficulty of their double objective, namely facing the

deep economic crisis while at the same time keeping a reasonable level of protection of

wages.

"We thought it was necessary to sign a pact with the objective of decreasing the inflation rate and of

putting public budget under control, but also to get in exchange a more stable collective bargaining

system in order to protect wages, in the event of changing the indexation system" (Int. n. 1).

The social partners were split on the matters to be covered by the agreement. Confindustria

preferred a short-term agreement which would rapidly intervene in the economic crisis.

Principally at issue for Confindustria were the various levels of wage determination. The

employers’ association pressed for a single level of wage bargaining 9 in order to avoid

overlaps between levels. The union confederations instead wanted a long-term structural

agreement whereby incomes policies would be used not only to achieve macroeconomic

stability but also to increase investment and employment. The confederations argued for

two levels of collective bargaining, and they also wanted the negotiating of wage rises to

be allowed at company level as well. The government, for its part, would have preferred

confirmation of the two-tier collective bargaining system – accompanied, though, by a law

establishing a special social contributions regime for wage increases negotiated at firm

level (Mascini, 2000; Molina Romo, 2004).

Given the diversity of these positions and the likely impossibility of reaching agreement, at

the end of July 1992 the then prime minister Giuliano Amato submitted an ‘unmodifiable’

proposal to the social partners. This did not resolve all the issues, and as regards the

bargaining structure it only made commitments to resolving the question in the near future.

Nevertheless, Amato’s proposal did crucially envisage abolition of the scala mobile,

namely the wage indexation mechanism. Following negotiations internally to the trade-

union confederations and the threat to resign by prime minister Amato, the agreement was

signed in order to avert the economic damage that a government vacuum would cause (see

Table 1, Annexes). An extremely narrow majority of the Cgil secretariat decided to sign

the agreement when its leader Trentin cast his vote in favour (Mascini, 2000).

The gains by the government and Confindustria consisted mainly in the unions’ agreement

to abolition of the scala mobile and the year-long suspension of firm-level bargaining. The

9 The national or regional level, or even the company level as long as it was regulated by the national-level

agreement, while firm-level bargaining should be concerned with qualitative issues (for instance, workforce

involvement in company management).

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DSLW WP 2/2009

unions, however, received no economic pay-off for their cooperation, apart from a pledge

by the government to maintain the real purchasing power of pensions, and a promise that

negotiations on reform of the collective bargaining system would begin before 1993.

The negotiation has been affected both by the period of economic and political emergence

and by the social partners’ internal transformations seen in the previous paragraph. For the

unions, the Social Pact of 1992 provoked the same reactions as the Pact of 1984, with

internal opposition (mainly within Cgil) and demonstrations against the trade-union leaders

by the autoconvocati movement (Baccaro, 2001).

In any event, the turn taken by the negotiations shows that none of the three actors was in a

position to prolong matters for very long, or to adopt ‘exit’ strategies (despite Cgil’s

opposition to the agreement) with which to influence outcomes. Strong awareness of

interdependence among the actors consequently developed during the negotiations: the

interest organizations accepted the government’s proposal because it was necessary to

intervene in the economic system.

In fact, our interviewees underline two main aspects: on the one hand, Cgil felt obliged to

sign the pact against its own willingness; on the other, social partners had little alternative

but to cooperate with a government firmly and directly determined to reach an agreement.

"The objectives of the pact changed during the negotiation process. The initial goal was to give rise

to an incomes policy via change of the bargaining structure, but then discussion moved to the role of

the indexation mechanism in fuelling inflation. The difficult economic situation and the absolute

necessity to intervene rapidly changed power relations by weakening unions' resistance and leading

to an internally controversial decision by Cgil to sign. Had Cgil not signed, economic crisis would

have further deepened and Cgil would have been held responsible for it" (Int. 1).

"The dramatic economic situation obviously shaped unions' strategies, forcing them to give exit

from crisis absolute priority. Cgil's objectives were to keep both the indexation system and

collective bargaining autonomy. Neither of them entered the pact and this led to heated internal

discussion, including resignation by the Cgil's general secretary. Eventually Cgil signed as well

because considerations of general interest prevailed, but with a feeling of having its signature

'extorted' by the government, which gave a 'take it or leave it' ultimatum". (Int. 2).

A salient feature of this power relations context is that there were no marked imbalances in

negotiating power among the three actors. As we have seen, in 1991 the interest

organizations asked the government to mediate among their interests; but this was a

government weakened by its lack of a parliamentary majority. The government had not the

power to conduct social partners toward an agreement on the reform of collective

bargaining system, and this is why it was postponed.

14


2.2.3 Pact of July 1993

DSLW WP 2/2009

The initiative to resume negotiations was taken by prime minister Amato, and the interest

organizations gave him their backing (except for Cgil that, because of its internal tensions,

was the most indecisive). It was necessary to tackle the economic crisis, and whilst the

Amato government took unilateral and drastic action on public spending, it also sought the

consensus of the social partners in order to curb inflationary pressures. Measures to reduce

the cost of labour and wage increases were the priorities for Confindustria, but they were

also on the agenda for the union confederations, which wanted not only to achieve closer

coordination among their various levels of action but also to institutionalize their

participation in policy-making.

Following the 1992 agreement, after several meetings on reform of the collective

bargaining system (an issue outstanding from the previous year), in June 1993 the union

confederations and Confindustria still adhered to their conflicting positions taken up the

previous year.

The Cgil, while internally divided on the strategies to adopt, saw negotiations leading to a

new pact as a chance to advance its proposals on collective bargaining structure, in this

way counteracting the relative 'defeat' of 1992.

"The 1992 pact had been a delicate issue for Cgil, which signed it in spite of its opposition to

abolishing the scala mobile. It was now necessary to find a solution to the problem of the bargaining

structure. The Cgil saw the new accord as a way to fix the damages of the previous year. Reform of

collective bargaining was a 'union' objective, unlike what it was forced to do in 1992, when general

interest goals prevailed" (Int. 1).

"In 1993 we started negotiation with very clear ideas about incomes policies and autonomy of

collective bargaining: we felt it necessary to recover on our failure in the previous year, namely our

acceptance to suspend firm-level bargaining" (Int. 2).

During the first month of negotiations Tangentopoli continued to aggravate the instability

of the government, which resigned. The negotiations were taken over by a new

technocratic government headed by Carlo Azeglio Ciampi, under the new Minister of

Labour, Gino Giugni, the most prestigious labour law scholar in Italy (Mascini, 2000).

The unions demanded that, if the duration of collective agreements was extended to four

years, wages should be aligned with the real inflation rate twice during this period. Giugni

knew that thus introduced would be a mechanism similar to the scala mobile, and this the

employers would never accept. He therefore proposed a contractual rather than automatic

system of wage/inflation rate alignment. Giugni’s proposal was not contested. In the end

15


DSLW WP 2/2009

the parties agreed to confirm the rule that firm-level bargaining could only take place

where possible, and on the basis of power relationships (ibid.).

Confindustria was in an uneasy position during the negotiation. It was very difficult for it

to present strong and internally consolidated arguments during the negotiation, as it was

still weak and internally fragmented. Besides the impact of Tangentopoli, which continued

to debilitate the organization, internal disputes grew more heated between the owners of

small firms and those of medium-to-large ones on how to deal with the economic crisis

(Bellardi, 1995).

On the unions’ side, internal divisions certainly abated during the period (without space for

dissent being eliminated, however), and this was matched by a propensity to unity among

the three confederations. The period between the pacts of 1992 and 1993 also saw greater

efforts by the confederations to forge trade-union unity 10 . "The unions had grown more

compact in their demands and therefore perceived themselves as wielding greater

negotiating power" (Int. 1), and perhaps let the other actors gain the same impression. The

agreement was concluded on 3 July by the government, Confindustria, and the three union

confederations (see Table 1, Annexes).

Compared to the pact of the previous year, the outcomes of the July 1993 agreement were

decidedly more advantageous to the unions. The confederations were now able to structure

their participation in national-level policy-making, and they had also obtained a reform of

the bargaining system which matched their interests in that it also included a new

structuring of workplace union representation. This tripartite negotiation enabled the

unions to institutionalize their role in decision-making, both central and decentralized

(through the workplace union representation structures), while it gave the government a

certain degree of legitimacy. Confindustria (and the government) obtained the unions’

commitment to wage restraint and the moderation of social conflict.

On the occasion of the tripartite agreement of July 1993 the internal fragmentation of the

unions diminished. For the first time in the history of Italian trade unionism, the agreement

was signed only after it had been approved by workplace referendums. Although the

parties finalized the agreement on 3 July 1993, it was actually signed on 23 July 1993, after

the referendums had been held 11 . The autoconvocati did not mobilize (opposition to the

10 During the Cisl congress of 1993 the proposal was put forward that the union should turn itself into a

single political actor – different and independent from the traditional political parties – given the crisis of

Italy’s political system.

11 The union confederations organized around 30,000 assemblies in the largest factories and offices. Around

1.5 million workers voted, and 68% of them approved the agreement. Only three sectors (automobiles, air

transport, universities) out of 50 rejected the agreement on incomes policy.

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DSLW WP 2/2009

agreement was expressed through workplace assemblies), not because they were in favour

of the agreement, but possibly because they appreciated the novelty that it introduced:

more precise rules on the relationship between the rank-and-file and the confederations

(Baccaro, 2001).

The pact took place amid new awareness by the parties that they were mutually

interdependent, especially if a solution was to be found for the profound crisis afflicting

the national economy. To face the economic situation it was necessary to obtain the

consent of each social partner. Thus, despite the different degrees of negotiation power, it

was necessary to conciliate social partners’ positions and this was difficult without the

exercise of external authority. The mediation performed by the Minister of Labour Giugni

had a significant impact on the outcomes of the negotiations. Interviews with several actors

underline the importance of his role during the negotiation.

"The Prime Minister and the Minister of Labour have played a strong role of guarantors. They were

fully and directly involved in designing and reaching the deal. Their competence and

authoritativeness made them ideal subjects to mediate among our positions, as their proposals were

capable to take all views into account" (Int 2).

2.2.4 The negotiated pension reform (May 1995)

In 1994, the social partners sought to keep the ‘concertation table’ alive, for fear that the

election of a centre-right government would gainsay the provisions of the July 1993

agreement. Prior to the elections, the trade-union confederations and Confindustria sent a

joint delegation to the President of the Republic in order to affirm their commitment to

concertation – a method, they declared, which they would not forego because the July 1993

agreement had proved a crucial instrument of a modern incomes policy (Giugni, 2003).

However, the new centre-right government refrained from giving any immediate

reassurance on concertation. And despite subsequent reassurances by the Prime Minister,

in the autumn of 1994 the new government unilaterally enacted a series of drastic financial

measures, among them reform of the pensions system. The purpose of the reform was to

solve the pensions problem by changing the criteria to calculate benefits. In 1992 the

Amato government had altered the eligibility criteria (raising the retirement age, and

increasing the minimum years of contributions). However, more structural reform was

deemed necessary, and pensions calculated on the retiree’s final earnings were replaced by

pensions calculated on total contributions paid. Seniority pensions (to which 35 years of

contributions gave entitlement) were abolished. These measures conflicted with the

acquired rights of numerous categories of workers, and they also undermined the power of

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DSLW WP 2/2009

the union confederations which controlled the INPS, the institute which administered the

majority of private-sector pensions (Regalia and Regini, 1998).

Negotiations on the financial manoeuvre began in the autumn of 1994. There ensued a

series of trade-union rallies and general strikes. Unions demanded withdrawal of the

proposed reform of the pensions system and on 2 December, in order to avert further social

conflict, they signed an agreement put together by the Minister of Labour, Clemente

Mastella. Once again there was a risk that only Cisl and Uil would sign the agreement, but

Cgil belatedly did so as well. A further reason for scrapping the reform bill was that the

centre-right government was collapsing and it no longer made sense to reform the pensions

system by means of the budget law and have to withstand the discontent and social conflict

which it would provoke. The government withdrew the bill, therefore, and deferred social

security to a general provision on pensions system reform (Giugni, 2003).

Immediately on his appointment as prime minister of a new "technocratic government",

Lamberto Dini announced the resumption of dialogue with the social partners on the basis

of the July 1993 agreement. Negotiations were prolonged, lasting for several months, but

in the end an agreement between trade unions and the government was reached in May

1995.

The May 1995 agreement was converted into a law which introduced stricter rules on

eligibility and less generous criteria for the calculation of pension benefits. Confindustria

did not sign the agreement. This outcome was important for the unions because they had

kept the pensions system for workers with more seniority (the largest part of their

members) largely intact (Regalia and Regini, 1998).

Reform of the pensions system was contested in particular by middle-aged industrial

workers. The union confederations organized a massive wave of assemblies (around

42,000) which were followed by a referendum. Some 4.5 million workers cast their votes,

and 64% of them approved the reform. The reform received sufficient support from

workers because the consolidation of the workplace representation system had given

greater empowerment to various groups (public-sector workers, service workers, the

employees of small firms) which did not agree with the militant bargaining style of the

metalworkers and other industrial ‘elites’ and instead favoured compromise and

moderation (Baccaro, 2001).

The events surrounding reform of the pensions system signalled a shift in power balances.

Whilst the interest organizations were still aware of the precariousness of their role in

management of economic policy, they had reinvigorated and restructured their internal

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DSLW WP 2/2009

strategies. Both sides of industry were therefore better able to deploy exit options during

negotiations in order to obtain outcomes in line with their interests.

The new power balance among the parties gave greater negotiating leverage to the unions

(also owing to the success of the rallies and strikes), which in fact obtained a reform which

did not significantly damage the interests of workers (especially those with a certain

seniority). But it also led to Confindustria’s ‘exit’ from the negotiations because it had not

obtained the more radical reform that it wanted.

2.2.5 Pact of September 1996 (‘Pact for Employment’)

The dialogue with the social partners was resumed in 1996 by the new elected Prodi

government, which found itself forced to take action on employment in order to reverse

negative trends in the labour market, and also on the public accounts in order to comply

with the convergence criteria established at Maastricht. In regard to the labour market, it

was necessary to shift from passive measures to support employment (early retirement,

subsidies for firms, etc.) to more active policies (Giugni, 2003). Whilst the position of the

Prodi government did not differ significantly from that of the previous governments which

had negotiated with the social partners (the need to overcome the economic crisis in order

to comply with the Maastricht parameters, and the government’s need to increase its

legitimation), the stances of the social partners changed to some extent.

Internally to Cgil, after reform of the pensions system and at the congresses of 1996,

divergent positions were taken up on the strategies to adopt. The general secretary of the

metalworkers’ federation (Fiom) reiterated the need to return to a strategy of conflict, on

the grounds that wage increases based on company performance ran the risk to become

unilaterally decided by the employers, so that the unions would have no influence on them

in the long run. The confederation’s leader Sergio Cofferati did not criticise this position.

But within Cgil there were also positions contrary to Fiom’s and which instead argued for

trade-union action based on dialogue and participation (Mascini, 2000). This was also the

stance traditionally adopted by Cisl, together with the idea of unity of action.

The positions of Confindustria were not completely favourable to concertation. In 1996 a

new president was elected (Giorgio Fossa, a small businessman more concerned with

problems of firms’ competitiveness than with industrial relations issues). He therefore

distanced himself from concertation, stating that the period in which it was necessary for

the social partners to assume political tasks had by now ended. Anyway, it was necessary

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DSLW WP 2/2009

to intervene on the labour market and Confindustria probably wanted to press on its

demands trying to obtain better results than on pensions reform.

The need to intervene in the labour market was not disputed during the negotiations. What

instead was ruled out of discussion, mainly by Cgil, was incomes policy. And it was in fact

Cgil that opposed the government’s request for a 2.5% ceiling on pay rises. In exchange

for employment creation measures, the government asked the employers to accept tax

increases if necessary, and Confindustria reacted positively (Molina Romo, 2004). The

agreement was signed by the trade-union confederations, Confindustria (as well as other

employer organizations), and the government in September 1996 (see Table 1, Annexes).

In 1997 this ‘Pact for Employment’ was incorporated in the ‘Treu Law’ which introduced

various provisions as regards labour flexibility, although they were regarded as inadequate

by firms because of their limits and the numerous controls required by the legislation

(Salvati, 2001). The agreement did not formally define the rules on concertation – the most

important issue for Cisl – established by the 1993 agreement: this would have required

reviews of the implementation of agreements. Moreover, the pact did not address incomes

policy issues because of Cgil’s opposition (Giugni, 2003).

The principal feature of negotiations on the pact was the option left open by Cgil of

recourse to conflict. The risk was of most concern to the government (probably because it

feared losing legitimacy in the eyes of its left constituency), which consequently agreed not

to negotiate incomes policy issues. Moreover, a type of ‘controlled’ labour-market

flexibility was introduced (Regini, 2000), and this was probably the result of effective

pressure by the unions.

2.2.6 Pact of December 1998 (‘Christmas Pact’)

At the end of 1997, the centre-left Prodi government was pressed by the Communist

Reconstruction Party to present a bill in parliament which would reduce working time to

35 hours a week (it was a pledge, made during the government crisis of October 1997, in

exchange of the renewed support for the coalition). Both the union confederations and

Confindustria protested against the unilateral action taken by the government on working

time arrangements. Confindustria threatened to cancel the July 1993 agreement and unions

responded in highly critical and preoccupied terms to Confindustria’s announcement

(Lavoro e informazione, 1998).

The interactions between government and social partners enhanced after Italy fulfilled the

Maastricht parameters. Confindustria withdrew its threat to revoke the July 1993 pact, but

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DSLW WP 2/2009

reiterated a formal request for discussion on all aspects of concertation – a method which it

considered valid but had been betraid by the law on the 35-hour working week. Also the

prime minister declared his commitment to continuing dialogue with the social partners.

The three union confederations welcomed Confindustria’s decision not to abandon the

‘concertation table’ – calling it an “act of responsibility” (ibid.).

After the crisis which led to the resignation of Prodi, the negotiation was carried out by the

new centre-left government headed by Massimo D’Alema, who strongly supported the

resumption of dialogue between the social partners (even if there were voices hostile to

concertation within the government coalition: the parties furthest to the left in the coalition

envisaged a resumption of conflict as the only way to achieve compromises between the

social parties).

Before negotiations began, the new prime minister urged the participation in them of other

actors as well: representatives of small firms, the non-profit sector, and local governments

(especially in the southern regions). The general secretary of Cgil was contrary to such

enlargement of participation, and he emphasised its impracticality. The climate was no

longer that of economic emergency, and the objectives of the pact were to discuss the

bargaining system, but especially to reaffirm and strengthen relations between the

government and the social partners. The government pursued this goal by highlighting its

neutral position (to counter fears that power balance might have shifted towards Cgil,

given its political closeness to the government) and the inclusion of other collective actors

in the negotiation was partly instrumental to this goal. The political nature of the

government (the first to be headed by a former communist) required reassurances of its

impartiality to be made to Cisl and the employers’ organizations, which feared the political

influence of Cgil.

During meetings held between the prime minister and the social partners, the question of

enlarged participation was clarified and then accepted, after the idea was put forward of

dividing the Pact into two distinct parts: (i) incomes policy and bargaining arrangements,

which would be negotiated by the government, unions, and the employers’ associations;

(ii) policies for development and employment, which would be discussed also by

representatives of local governments, principally the Regions (Lavoro e informazione,

1998).

The entire issue of revising the July 1993 agreement rotated around the two-tier bargaining

system: the employers had accepted it as the price exacted for general agreement but now

wanted to alter it, while the unions intended to keep it intact (Mascini, 2000).

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DSLW WP 2/2009

The difficulties of reaching agreement on the bargaining structure forced the actors to set

the issue aside. The provisions of the 1993 pact were thus confirmed in order not to

prolong the negotiations unduly, the principal purpose of which was instead to reaffirm the

validity of the concertation method.

The agreement was signed after consultation of the employers’ associations and the unions

in January 1999. There were numerous signatories: the government and 32 interest

organizations. The agreement substantially confirmed the provisions of the 1993 pact (see

Table 1, Annexes).

The unions agreed to continue with a policy of wage moderation. They gained further

institutionalization of their participation in policy-making from the pact, while the

employers obtained the government’s commitment to implementing fiscal measures to

reduce the cost of labour and to encourage investments. The ‘Christmas Pact’ was more a

symbolic pact by which actors tried to reaffirm their mutual spheres of influence than a

pact by which to negotiate relevant reforms and this was possible given the end of the

period of ‘economic emergency’. This is precisely what emerges from our interviews,

which insist that the main issue at stake was not reforms but rather government's

willingness to re-establish a climate of cooperation with social partners.

2.2.7 Pact of July 2002 (‘Pact for Italy’)

At the beginning of 2000s social partners started a period of not easy interactions. Unions

and Confindustria were changing their strategies to face the economic situation.

Concertation on economic issues was not taken for granted because of the relative power

achieved by both Confindustria and the unions thanks to the reduction of their internal

fragmentations, as seen above. Confindustria, with Antonio D’Amato as president (a small

businessman), started a period of progressive distancing from the social dialogue and

considered the election of the centre-right coalition a possibility to reform radically Italian

economic rules.

After the victory of the centre-right coalition the president of Confindustria asked the

newly-elected prime minister Berlusconi to “make even unpopular choices” in order to

reform the Italian economy. Berlusconi acceded to the request, but then adopted an

accommodating stance towards the unions as well (Rassegna sindacale, n. 23, 2001).

Together with the pressure on the government, Confindustria tried to obtain unions’

consent and to this end, it proposed a ‘Pact for Competitiveness’ targeted on pensions,

labour-market flexibility (fewer constraints on hiring and dismissals), and the tax burden

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DSLW WP 2/2009

on firms. Cgil was critical and its leader declared that they refused to negotiate a pact

which comprised a wide range of issues like the pacts of 1993 and 1998. For its part, Cisl

(which had elected a new general secretary, Savino Pezzotta) and Uil (with the newly-

elected secretary Luigi Angeletti) pronounced in favour of negotiation (Molina Romo,

2004).

The new president of Confindustria stated his organization’s willingness to sign a separate

agreement with Cisl and Uil in order to resolve the deadlock. The Minister of Industry

stressed that union unity was not an indispensable condition for agreements to be reached

(Il Sole 24 ore, 10 February 2001). In February 2001 an agreement was concluded by

Confindustria, Cisl and Uil. Cgil held firmly on its views which were officially reaffirmed

to the Minister of Labour in March (Rassegna sindacale, n. 10, 2001). Cgil sought in this

way to maintain an institutional role by officially notifying its views. On the other hand, it

adopted a conflict strategy in order to oblige the other social partners to take account of its

positions.

In October 2001 the government issued a White Paper written by a group of experts which

established the framework for reform of the labour market and the industrial relations

system. The White Paper made reference to the concertation method and remarked upon its

inability to deal with the new magnitude assumed by economic and social problems. In

short, for the new government concertation had been used in a distorted manner (Giugni,

2003).

During the months following publication of the White Paper, the government advanced a

number of law bills for reform of the labour market, the pensions system, and taxation.

Confindustria indicated its intention to abandon the concertation table and to support

unilateral action by the government on labour-market reform. Cgil reacted to the White

Paper by rallying against the policies proposed, while Cisl and Uil were still amenable to

dialogue.

The government and Confindustria saw Cgil's behaviour as dictated by a political bias

against the centre-right cabinet.

“Cgil had a clear political bias, while the two other confederations were oriented to a political

exchange. Our objective was not to isolate Cgil, but to have the largest possible number of social

actors converge on this exchange. Clearly, in Italy reforms can only succeed if the unions cooperate:

not even the Berlusconi government, in spite of its clear parliamentary majority, had the political

strength to act unilaterally. This unwritten rule had virtuous effects when emergencies had to be

faced, but its outcomes could never be fully satisfactory” (Int. 4);

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DSLW WP 2/2009

“During negotiation of the pact, Cgil's attitude was to sit at the table but ready to leave it right away.

This was dictated by its political bias, while the article 18 [reform of dismissals] was used as an

excuse (Int. 3)”.

During the negotiations on the reforms proposed by the government, also Cisl and Uil

walked out of the talks in reaction to the government’s refusal to consider the unions’

demands. In April 2002, jointly with Cgil, they announced a general strike in which around

13 million workers took part. The protest centred on the government’s fiscal policy and

reform of article 18 of the Workers’ Statute (i.e. the rule on reinstatement of workers

dismissed without ‘just cause’ by firms with more than 15 employees). The unions’

negotiating power was boosted by the success of the general strike: the government was

forced to reconsider its position on the unions’ demands:

“A social pact was not necessary per se; the main reason to pursue it was to find some agreement

with the unions on the article 18 and to speed up labour market reform. Not the whole of

Confindustria was in favour of new negotiation with the unions (we could have acted directly by

pressuring the government), ma the unions' consent was necessary to speed up reforms” (Int. 3);

Talks resumed in May 2002, when the government indicated its willingness to consider the

unions’ demands on reform of the social shock absorbers and repeal of the legislation on

article 18. However, Cgil did not consider the government’s decision on article 18 to be a

genuine repeal and refused to take part in the negotiations. Cisl and Uil instead reacted

favourably to the report issued by the government and to the transfer of reform of article 18

to a separate bill (Eironline, 2002). The benefit gained from the general strike in terms of

negotiating power was vitiated by Cgil’s exit from the negotiations, which signalled deep

divisions inside the trade unions.

On 5 July 2002 the Pact for Italy was signed (see Table 1, Annexes) by the representatives

of the government, all the employers’ organizations (including those traditionally close to

the parties on the left, like Lega delle Cooperative and Confesercenti) and the unions (Cisl,

Uil, Ugl and Cisal), but not by the largest confederation, Cgil. Implementation of the Pact

was almost entirely referred to legislation.

The employers obtained from the Pact increased labour-market flexibility and the

government’s commitment to tax reform (in particular of taxes levied on firms), while the

gain for the unions was that certain labour-market reform measures were introduced only

temporarily and experimentally, as well as the government’s undertakings to aid the South

of Italy and to combat irregular work (L’imprenditore, 2002). The outcomes of the

negotiation were unbalanced toward government and Confindustria and this was perhaps a

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DSLW WP 2/2009

consequence of the breakdown of unions’ unity. Unions could not oppose unitary strategies

and reactions and then the return of inter-organizational fragmentation diminished their

negotiation power.

2.2.8 Pact for Welfare 2007

During the previous government, social dialogue had suffered a setback. The basic contrast

between social partners and government was on reforms of the labour market, the

bargaining structure and pensions. Especially in 2002-2003 social conflicts were quite

intense, as shown in table 10 (Annexes).

The labour market reform envisaged in the Pact for Italy became law in 2003. This law

was supported, with doubts, by the trade union confederations signatories of the Pact

(CISL and UIL), while strongly opposed by CGIL. The latter proposed a referendum on

reform of unemployment benefits, extension of the protection against dismissals, and

extension to a-typical workers of the same rights enjoyed by regular employees, but the

proposal did not reach the quorum needed for a referendum to be held (Eironline, 2003).

The social partners showed different strategies and visions on the bargaining structure, too.

On this theme, in 2004 the new president of Confindustria, Luca Cordero di Montezemolo,

sought dialogue with trade unions. But the dialogue was not possible due to Cgil’s

criticism about the real need of reforming the existing bargaining structure (CNEL, 2006).

The pensions issue was, instead, an area of rapprochement for trade union confederations.

The pensions reform in 2005 (which has substantially tightened the eligibility criteria even

if its implementation was postponed to 2008) was a first resumption of social dialogue.

Although to a limited extent, this dialogue developed not so much with the government,

but between union confederations (which opted again for a unitary general strike against

this reform) and employers' associations (which held an almost neutral position). The

unitary and bilateral social partners’ action was in particular focused against the economic

policy of the government.

In the autumn of 2004, the unions and Confindustria signed a pact for competitiveness, that

included proposals for Southern Italy development and for research and collaboration

between universities and companies. The social dialogue, then, continued bilaterally.

Unions unity helped to increase the confederations awareness of their relative power

(although not at the levels achieved in the past). Indicators of this perception were both the

use of general strikes and the joint signature of metalworkers contract (a matter that at that

time was not so obvious). As Carrieri (2007) stressed, the recourse to conflict in the period

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DSLW WP 2/2009

2001-06 produced more effects on the re-construction of collective identity than on the

actual influence on policies.

With the election of Prodi in 2006, both social partners had strong expectations. On the one

hand, the unions and Confindustria were aware of their power to press the government to

obtain what they required. On the other, they were aware of their interdependence in a

climate of economic emergency.

The government, that was politically weak but was oriented to social dialogue, convened

the social partners in March 2007 (following their repeated appeals) and proposed a joint

solution on three main areas (Eironline, 2007): productivity and competitiveness;

modernization of public administration and reduction of costs; welfare reform.

For each one of the above themes, "concertation committees" were established. The

negotiation took place in a quite positive atmosphere. Pensions and bargaining structure

reforms were the most controversial themes. Confindustria criticized the reform of social

security, on the grounds that it would be too heavy for public finances. At the same time

the unions threatened a strike on the new measures proposed for the modernization of

public administration.

The agreement was signed on 23 July 2007 (the same date of the historic agreement of

1993) by the government, CGIL, CISL, UIL and Confindustria (see Annexes, table 1).

CGIL and Confindustria expressed criticism about this agreement. Cgil considered the

pensions reform inadequate because it would not improve the eligibility criteria (made

more strict by the previous government’s reform in 2005), whereas Confindustria criticized

it for being too costly for the economy (Rassegna Sindacale, July 2007).

In the autumn of 2007 a referendum among workers and pensioners was held, in which

over 80% of voters endorsed the July agreement. Dissent concentrated mainly in

metalworkers factories and in call-centres environments.

Despite criticism and oppositions, the pact for welfare was characterized by the willingness

of the social partners to cooperate for the common goal of economic recovery. The exit

option was not considered a winning strategy by either trade unions or Confindustria. The

unions were strongly interested in remaining a partner in the negotiation of such strategic

themes and with a government inclined to negotiate with them. Confindustria, on the other

hand, obtained relevant tax grants for companies.

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3. The Evolution of Social Pacts: a Partly Failed Institutionalisation?

3.1 Mechanisms of institutionalisation

By mechanisms of institutionalisation we mean the processes that lead to a stable and

recurrent concertation as policy–making device. More specifically, we mean the ability of

social pacts to serve socio-economic needs, to produce satisfactory outcomes for the actors

and to create inter- and intra- organisational ties and networks. In this section we will then

describe the main outcomes generated by the tripartite agreements: on the one hand, we

shall consider objective indicators of socio-economic performance throughout the period in

which these agreements have been signed; on the other, we shall examine institutional

outcomes – the degree of structuring and coordination in intra- and inter-organizational

relations. Finally we shall consider the role of governments in concertation.

3.1.1 Socio-economic outcomes

Analysis of the socio-economic outcomes of the social pacts first requires examination of

the time-trends of economic indicators. This provides objective evidence on the

performance of the Italian economy in periods when the social partners negotiated certain

aspects of economic policy.

Table 2 in the Appendix shows longitudinal data on the main economic performance

indicators from 1977 onwards – that is, from the year when concertation first emerged in

Italy. However, the data set out in Table 2 are not directly connected with social pacts; they

can only be used to infer the socio-economic impact of pacts indirectly.

In light of the discussion in the previous section, to be emphasised is the impact of pact

provisions concerning wage determination (mainly from 1992 onwards) on the inflation

rate. Two Italian studies (De Novellis, Origo and Vignocchi, 2002; CNEL, 2004 12 ) on the

macroeconomic effects of social pacts from the July 1992 agreement onwards provide data

that highlight the relationship among bargained wages, real wages, and inflation 13 . Table 3

(see Annexes) sets out these figures and relates them to the expected inflation rate (the

benchmark for calculation of pay rises established by the 1993 pact).

We can determine the ‘wage drift’ by comparing between the percentage variations of

bargained hourly wages and those of actual wages as shown in Table 3. The most marked

12 Probably the continuation of the 2002 study, given that the topics and scheme discussed are the same.

However, the CNEL 2004 document does not state its authors.

13 Data from 2004 to 2007 are our elaboration.

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DSLW WP 2/2009

differences between the two percentage variations occurred in 1993, 1996-97, 2000 and

2003, while in 2007 bargained hourly wages and actual wages recorded the same

percentage variations. Not surprisingly, given the still imperfect application of the new

collective bargaining structure (which imposed the constraint that deals reached at the

national level could not be renegotiated at the plant or territorial level), in 1993 the

variation in actual wages was 1.4 percentage points higher than the variation in bargained

wages. However, the fact that in some subsequent years there was a difference of around 1

percentage point between the two variations may not necessarily imply a strong wage drift

but rather overall adjustment of the wage determination system to the one established by

the 1993 Pact. Before drawing hasty conclusions as to the efficacy of the 1993 Pact in

regulating wage determination, it is necessary to examine the components of this ‘wage

drift’ more closely.

Some recent Italian surveys of second-level agreements have highlighted their large wage

component. A sample-based survey (Bordogna and Marchetti, 2002) 14 shows that pay

components (mainly performance-related bonuses) represented the issues most frequently

covered by agreements (in 116 out of 151 agreements). A previous longitudinal survey –

covering the years between 1984 and 1994 (Bordogna, 1997) – conducted on a broader

sample 15 highlighted the relative importance of pay in company-level bargaining: around

40% of the firms in the sample had bargained on pay-related issues in the period 1984-90,

and around 30% in the period 1991-93. Pay was invariably among the four issues most

frequently bargained at the decentralized level, and in some years it occupied second place

after trade-union rights (in the period 1988-89). From the early 1990s onwards pay

increases were constant and in fixed figures. Also a recent study based on the national

archive of private sector company bargaining (2946 company agreements) shows the

prevalence of pay components - again mainly performance related bonuses (Monitor

Lavoro, 2007).

Hence, in order to determine the impact of the July 1993 Pact and therefore the actual

weight of the ‘wage drift’, it is not enough to observe whether decentralized bargaining is

characterized by agreements on pay, and principally performance-related bonuses.

Required instead is analysis of the components of the pay increase: the more the latter is

based on fixed amounts, the more wage determination by decentralized bargaining tends to

14 The sample consisted of 151 agreements signed in the industrial sector during 2000 and archived by the

CNEL (Consiglio nazionale dell’economia e del lavoro).

15 The survey was conducted by CESOS on behalf of the CNEL. The sample consisted of more than 1000

production units in the industrial sector, all of them with at least 20 employees (after 1991 the sample

diminished to 750-600 units).

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DSLW WP 2/2009

overlap with national-level bargaining, thereby increasing the wage drift. The agreement of

July 1993 in fact established that performance bonuses should be based on variable

components tied to corporate economic results precisely in order to avoid the overlap

between the two bargaining levels (Rossi and Sestito, 2000).

A sample-based survey (Casadio, Lamelas and Rodano, 2004) restricted to the industrial

sector – the results of which are set out in Table 8 (see Annexes) – shows that the ‘fixed’

components (or the ‘traditional’ ones, i.e. the practices followed prior to the July 1993

agreement) of supplementary pay increments in firms where they are negotiated have

diminished over time, being replaced by bonuses based on company performance.

3.1.2 Institutional outcomes

Integration of central and decentralized action

Longitudinal examination of tripartite agreements shows that those of 1992 and 1993

marked the beginning of closer coordination between the two levels of action. More

specifically, prior to those years the distance between workplaces and the central level of

action was a problem for the unions (although also Confindustria had similar problems of

coordination), in terms not only of controlling wage determination but also of strategies for

action.

The July 1993 agreement rationalized the principles, rules and practices which had slowly

developed since the 1980s. The tripartite agreements of 1983-84 provided for closer

coordination of negotiating levels with a clause stating that the two levels must not overlap

(a novelty with respect to the past when much use was made of postponement clauses) and

with the 18-month suspension of firm-level bargaining so that the social partners could

implement these measures. All the subsequent national collective agreements contained

this clause, but they did so in a manner more symbolic than practicable (Bellardi, 1997).

The strategies actually adopted by companies moved in two directions: employees’ direct

involvement to reduce the influence of trade-unions (ibid.); or ‘micro-concertation’, that is,

informal cooperation between management and workers’ representatives on industrial

restructuring (Regalia and Regini, 1998). Rather than being structured in more

homogeneous and systematic form, the two levels of action increasingly co-existed, and

they acted in substantially autonomous manner.

As described in section B1, the workplace representation structures were only partly

controlled by the three union confederations. The factory councils (which consisted of both

union representatives and representatives elected by the workers) were the most common

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DSLW WP 2/2009

types of representative body until the beginning of the 1990s (Regalia and Regini, 1998).

With the ‘federative pact’ of 1972, the three union confederations recognized the role of

the factory councils as workplace representation bodies. However, this did not increase the

degree of coordination between centre and periphery in that the procedures for electing the

representatives and the competences of the factory councils were unclear.

The trend in unionization only marginally sheds light on the dynamics between the two

levels. As table 4 in the Annexes shows, the 1970s were characterized by high union

density, probably encouraged by the militant strategy pursued by the unions until the 1978

‘Eur turning-point’, and revitalization of firm-level representation bodies (replacement of

commissioni interne with RSAs and factory councils). Towards the end of the 1970s,

however, union membership began to decrease, at the same time when the confederations

decided to shift their strategies towards closer collaboration with the other social partners.

The consequence of this change of strategy was a centralization of union action followed

by numerous worker protests against the confederations’ strategies of action (Regalia and

Regini, 1998).

Another factor responsible for the split between the rank-and-file and the confederations

was the advent of the ‘autonomous’ unions. As we have seen, during the 1980s new

workers’ organizations came into being which were opposed to the centralization of trade-

union action and sought to represent rank-and-file interests more directly.

Nonetheless, the decline in union density should not be taken to be a direct consequence of

scant coordination among the various levels of union action. As Regalia and Regini (1998)

stress, the decrease in union membership seems to have been mostly due to structural

changes in the economy, like expansion of the service sector, rather than being directly

caused by disaffection with the unions. Moreover, the widest gap between unions and

members was in the public sector, while the confederations maintained a relatively

prominent presence in the private sector – although until the 1990s the role of the unions at

decentralized level continued to be uncertain.

More useful for our purposes is analysis of union presence in workplaces; and also

examination of how the three confederations conducted negotiations at the decentralized

level. Hence, in order to determine if and how the July 1993 Pact influenced the degree of

coordination between the rank-and-file and the confederations, the most pertinent data

concern the RSU elections and the organization of bargaining levels. The former data

provide direct information on the prominence of the three confederations in workplaces,

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DSLW WP 2/2009

while the latter show how the relationship between the central and decentralized bargaining

levels evolved (and therefore the relationship among the various levels of policy-making).

The figures on RSU elections are decidedly favourable to the three confederations. The

data available refer to the first two electoral rounds after the creation of the RSUs. As

Table 5 in the Annexes shows, the majority of votes and seats went to Cgil, Cisl and Uil,

with the prevalence of the former in services and the public sector (according to figures

available on the 1998 elections). To be noted, however, is the increase in 1998 in the

percentage of seats obtained by unions not belonging to the three confederations, which all

together received more votes than Uil. These non-confederal unions, however, won no

seats in the public administration and very few in services.

Other interesting data on the workplace presence of the three confederations are provided

by a study (Bordogna, 1999) which reprised two surveys (1995, 1996) on a sample of 612

firms with at least 20 employees, stratified by industry and size.

The study reported the presence of works councils in 85% of the firms in the sample, albeit

with significant differences according to size: such bodies were present in almost all the

medium-to-large firms (>200 employees) but in only 40% of firms with fewer than 50

employees. In regard to the type of these bodies (RSU or other forms of representation) the

study showed that there were not marked differences between large and small firms.

However, there were some differences relative to the presence of representative bodies not

affiliated with the three main confederations: ‘autonomous’ unions were present in 12% of

the large firms (>500 employees) in the sample (Cobas in 5%) and associations of

executive cadres in 16% of these firms.

On moving to analysis of the data on firm-level bargaining it should be emphasised that

systematic and longitudinal surveys on this aspect have not been conducted in Italy. The

data available are therefore fragmentary and not completely comparable because they have

been collected by different surveys carried out at different times and across relatively short

time-spans. There is also a problem of representativeness, in that the sampling methods are

not always comparable over time and the samples are sometimes rather small. A further

problem concerning representativeness is that most longitudinal and systematic surveys

refer to the industrial sector alone. Nevertheless, despite these limitations, some of these

surveys furnish information that is useful for our purposes here.

The most systematic data available are again those collected by Bordogna (1997, 1999).

These data stop at 1996, because this author based his analyses on data systematically

collected by CESOS, which discontinued the survey in 1996. Table 6 in the Annexes shows

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DSLW WP 2/2009

the time-trend of bargaining on the basis of data collected for each year. The table shows a

downward trend in firm-level bargaining until 1994 and then its revival in the years

thereafter. The highest level of bargaining was recorded in the 1980s. The subsequent

decline was due to various factors both macroeconomic and institutional. The causes were

changes in economic and labour-market conditions, but also factors more closely related to

social pacts, such as the 18-month freeze on firm-level wage bargaining (as established by

the July 1992 agreement) and the postponement of second-level bargaining after the

signing of national-level collective agreements (as established by the July 1993

agreement). The decline was therefore due to transition from the old to the new bargaining

system, and it is for this reason that one observes a revival after this ‘settling-in’ phase.

Other studies, less longitudinal and/or systematic, highlight interesting aspects. The data in

this case were collected by two national agencies (ISTAT and the Bank of Italy). ISTAT

surveyed the composition of firm-level bargaining by firm size for the year 1995-96 on a

sample of around 8000 firms with at least 10 employees; while the Bank of Italy (Casadio,

Lamelas and Rodano 2004) conducted a longitudinal sample-based survey (around 1200

firms) on the industrial sector. Tables 7 and 8 in the Annexes set out the main results of the

two surveys.

Table 7 exhibits a trend in company-level bargaining tied to firm’s size. More specifically,

for the period 1995-96 company-level bargaining took place principally in medium-to-

large firms. In both the industrial sector and services, in fact, firms with more than 50

employees represented the largest percentage of those involved in supplementary

bargaining. Table 7 also shows that firm-level bargaining concerned around 40% of firms

in both industry and services, the highest incidence being among firms with more than 50

employees, in both sectors.

Although Table 8 refers to a smaller sample and only to the industrial sector, it

corroborates longitudinally (albeit somewhat fragmentarily) the findings for the period

1995-96. The figures in the first two rows of the table show that the percentage of firms at

which supplementary agreements were signed was markedly higher among those with

more than 50 employees, and also that bargaining coverage was broader for firms in that

size-class as well. By contrast, company-level bargaining was relatively rare among small

firms (note, however, that the figure refers only to 2001), so that the majority of workers in

those firms were not covered by bargaining.

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DSLW WP 2/2009

To conclude discussion of the structure of collective bargaining, we report the main

findings of a survey carried out by Bordogna and Marchetti (2002) which took stock of the

pacts of July 1993 and December 1998.

With regard to the degree of coverage by decentralized bargaining, given the dearth of

recent systematic surveys, these authors report the estimates published by the industry

union federations. The metalworkers’ national-level industry agreement implements the

July 1993 pact by providing for two bargaining levels: a national level which, according to

the federations, does not take account of the major differences within the metalworking

industry; and an in-company level, which according to the union federations covers only

50% of workers (out of a total of 1.7 million). As far as the chemicals industry is

concerned, the national agreement provides for a further two bargaining levels – territorial

and in-company – besides the national one. In fact, however, the territorial level of

bargaining is non-existent, and according to estimates by the confederations firm-level

bargaining covers only 40% of workers. It is widespread in medium-to-large firms but not

undertaken in small ones. Twenty percent of workers in the petrol and energy industry are

not covered by decentralized bargaining.

The bargaining structure in the public sector consists of a national level and a decentralized

supplementary one, which in turn divides into two levels (individual administration, main

or branch office). Decentralized bargaining does not deal with matters concerning pay or

training. Negotiated at decentralized level are issues to do with work organization and

working time. A study on the evolution of decentralized bargaining (CNEL, 2004) reports

the results of a sample-based survey on supplementary bargaining in the public sector

carried out in 2001 by Aran (the agency that represents public-sector workers in bargaining

rounds). These results are interesting because they show that collective bargaining covers

almost all employees of the units in the sample. The Aran survey also shows a correlation

between second-level bargaining and organizational size in the regional and territorial

administrations. Among the civil-service units comprised in the sample, only 1% of those

with more than 50 employees had not signed a supplementary agreement in the period

considered, whereas 8.3% of those with fewer than 50 employees had done so.

Institutionalisation of relationships with the rank and file and among the social partners

A second aspect of the development and structuring of inter-organizational dynamics is the

type of interaction that takes place between the confederations and the rank-and-file. In

other words, now examined is whether and how pacts have involved some form of rank-

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DSLW WP 2/2009

and-file consultation. Also important in this regard is how the rank-and-file has reacted to

the negotiating and signing of pacts.

Table 9 in the Appendix summarizes the methods used to consult the rank-and-file and the

reactions by the latter.

Analysis of consultation procedures and reactions by the rank-and-file yields further

information on the degree of coordination and structuring. Table 9 shows that workers

have not always been consulted. However, the pact of July 1993 marked the point at which

consultation no longer took place subsequently to the signing of a pact (as in 1984) but

prior to it. In the cases of the agreements of 1993, 1995, 1998 and 2007 reactions by the

rank-and-file no longer gave rise to mobilization but at most to voting against the pact.

Workers’ consultation was envisaged neither before nor after signature of the July 2002

Pact. The Cgil called a referendum of workers and organized a series of general strikes. It

then promoted a referendum on extending article 18 of the Workers’ Statute; however, on

this occasion a quorum was not reached.

A further question concerns the degree to which social pacts have influenced the

structuring and institutionalisation of relations among the social partners. This can partly

be determined by observing whether the text of a pact makes specific provision for future

formal meetings to review implementation of the pact, or for consultation of the social

partners when decisions on economic policy are taken.

Table 1 shows the presence in social pacts of pledges in regard to the involvement of the

social partners in policy-making. We have already commented on this aspect, pointing out

that the involvement of the social partners has been envisaged by all pacts since 1992

(excluding the pensions reform of 1995). The 1993 pact provided for assessment of

implementation of its provisions. In regard to the meetings with the social partners

stipulated by this pact, it is generally recognized that the two yearly sessions envisaged

(prior to the economic and financial planning document and to the budget law) have

regularly taken place. The most frequent issue debated at these meetings has been

definition of the expected inflation rate (in the Euro zone). The unions have sought to set

the rate higher in order to take account of real inflation and to obtain broader margins for

negotiation; Confindustria has obviously done the reverse.

Assessment of the implementation of the July 1993 pact has been included in the social

partners’ agenda for the further reason that, in years subsequent to the agreement, the

debate between Confindustria and the unions on the bargaining structure centred on the

efficacy of its two levels. After 1993, therefore, assessment of the pact regularly took

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DSLW WP 2/2009

place: indeed, in 1997 a thorough review was conducted by a committee appointed by the

government and chaired by the former minister of labour (Gino Giugni) who in the July

1993 agreement had played a key mediating role between the social partners. On January

1998 the committee submitted its findings to the prime minister. According to the

committee, the July 1993 Pact did not require alteration, only a revision that would

consolidate the results achieved. The committee made several proposals to this end

(Lavoro e informazione, 1998).

The agreements subsequent to this assessment (the ‘Christmas Pact’ of 1998, the ‘Pact for

Italy’ of 2002 and the ‘Pact for welfare’of 2007) did not specifically incorporate the

proposals made by the Committee. However, analyses of implementation of the provisions

of the social pacts shows the consolidation of one of the bodies proposed by the committee

(and to which the pacts make reference): that is, the joint bodies (enti bilaterali) already

provided for by national collective agreements and cited in social pacts since the second

half of the 1990s.

Analysis of bargaining both in the period 2000-01 (Bordogna and Marchetti, 2002) and

subsequently during 2002-03 and 2004-2006 (CNEL, 2004, 2006) shows the progressive

establishment by national collective agreements of joint bodies with differing tasks and

levels of action (national or territorial) according to the sector. Over the years, these bodies

have been used by the social partners to address the most critical aspects of the industrial

relations system.

Analysis of national industry agreements in the period 2002-03 and 2004-2005 (ibid.)

highlights the competences of these joint bodies as established by the most recent

agreements. Those signed from 2002 to 2005 set out the tasks of these bodies in some

detail: monitoring, together with other agencies, of active labour market policies; creating

instruments to match the needs of employers and those of workers, setting up observatories

on working conditions, workplace mobbing, safety, and corporate social responsibility;

providing the information required for the development of decentralized bargaining.

3.1.3 The role of governments in concertation

There has always been some degree of ambiguity in neo-corporatist theory as to whether

concertation can be captured primarily as an exchange of material and symbolic resources

between the state and interest organizations (Pizzorno, 1978) --- or even as a ‘mass of

transactions’ extending over a wide range of issues (Crouch, 1993; Marin, 1990) --- or

whether it should instead be conceptualized as the devolution of state authority to the latter

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DSLW WP 2/2009

(Offe, 1981). Even on the second interpretation, however, organized interests have to be

‘compensated’ for their willingness to participate in policy-making (Cameron, 1984), as

this involves costs for them. These comprise material costs for their members, who are

subject to a trade-off between immediate and long-term interests (usually wage restraint

versus welfare benefits and employment creation), and organizational costs in the form of

possible crises of representation. Stability of concertation has therefore traditionally been

considered higher where governments have greater resources to exchange with the social

partners and are more reliable in terms of their ability to deliver them (Regini, 1984).

But governments’ ability to ‘deliver the goods’ decreased everywhere in the 1980s, as

public deficit constraints became more stringent, cutbacks in the welfare state were

recommended by international organizations and rewarded by the financial markets, and

industrial adjustment involving downsizing gainsaid promises of employment growth.

Contrary to the assumptions of neo-corporatist theory, most social pacts in the 1990s have

not seen a return to a compensatory role of governments. What most recent negotiations

over collective bargaining procedures, incomes policies, pension reform and the like have

involved is the devolution of policy-making functions to organized interests (especially to

trade unions) in a framework of regulative rather than redistributive policies (Lowi, 1972).

Hence the process entails an allocation of economic policy authority in a context of

emergency and of basically shared objectives, rather than the exchange of resources

available to the partners.

With hindsight, it is not difficult to see why social concertation of the 1970s and the 1980s,

based on political exchange and on a compensatory role of the state, was inherently

unstable (Regini, 1997). First, because political exchange is a temporally asymmetrical

exchange. Whereas for the state institutions the benefits offered by organized interests ---

benefits which are principally legitimation and self-restraint in their market behaviour ---

have an immediate impact, the reverse is almost never the case. This requires of organized

interests a high degree of trust in the government and makes them vulnerable to ‘crises of

representation’. Second, because political exchange performs poorly in delivering the

expected goods to all the partners, as the implementation of their decisions often depends

on other actors' behaviour. Governments can devise policies favourable to one or all of the

organized interests involved in the exchange, but they cannot ensure that the public

administration will implement them in ways that effectively match the original intention.

And interest organizations, for their part, have a varying but never total ability to guarantee

that their members will comply with the decisions taken.

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DSLW WP 2/2009

Conceiving of concertation as an institutionalization of exchange, then, calls attention to

the unequal distribution (in terms of timing no less than of actual value) of its benefits

among the partners, to problems of trust when some of these benefits can only materialize

in the future, and to the poor performance of this method in delivering the expected goods,

as the implementation of decisions often depends on other actors' behaviour. All these

well-known problems make concertation unstable, as especially the British and the Italian

experiences of the 1970s showed (Regini, 1984).

On the other hand, structuring concertation as a devolution of policy-making functions to

organized interests may work better when it does not primarily involve an allocation of

selective benefits to them (redistributive policies) but rather the solution of urgent and

shared problems (mostly regulative policies). The symbolic components of the trade-offs

between governments and the social partners may well remain crucial; but their

cooperation must not depend primarily on the exchange of economic resources between

them. Governments may then structure their agenda by giving priority to the widely shared

problems (such as reform of bargaining procedures, incomes policies, new rules for public

employment relations, rationalization of the pension system, employment creation

measures) over partisan interests, by devising alternative solutions to them and by calling

on the interest organizations to participate in order to bring their values and preferred

solutions to bear.

3.2 Institutionalisation paths

In this section we will consider the evolution of the social pacts’ contents and their degree

of institutionalisation.

3.2.1 Changing issues of tripartite negotiation

Table 1 in the Appendix sets out the various issues negotiated for each pact, so that their

changes over time can be directly observed.

Three main features emerge from this table.

1. The relatively constant presence of issues concerning incomes policy and employment

policies. However, negotiation of incomes policy is incremental until the July 1993 Pact

and becomes simply confirmatory of previous agreements afterwards. In the recent (2007)

Pact for Welfare, commitments to foster company-level bargaining show a renewed

attention to incomes policy by social partners. On the other hand, employment policies,

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DSLW WP 2/2009

while they are limited to generic pledges in the early ‘90s, get to centre stage with the 1996

Pact for Employment, the 2002 Pact for Italy, and the 2007 Pact for Welfare;

2. Also to be noted is a tendency for the issues negotiated to increase – as shown by the

cells in the row “other issues”. These may concern support for firms, undertakings relative

to tax reform, policies on infrastructures and investment in the South of Italy. The only two

key issues in these cells are the creation of a new works councils structure (the RSU) in

1993 and the reforms of the pensions system in 1995 and 2007.

3. All the tripartite pacts contain commitments by the government to involve the social

partners in policy-making, and a specific timing for the negotiation of economic policy

issues and for the joint assessment of a pact’s outcomes.

In analysing change over time, however, one should also take into consideration that the

overall range of issues which were the object of tripartite negotiation increased

dramatically because of the diffusion of “territorial pacts”, alongside the national social

pacts that we have discussed in Section B, .in the second half of the 1990s. Territorial

pacts, based on formal agreements among local governments, unions and employers’

organizations, and other important local actors – such as banks, universities and various

private participants – were innovative forms of decentralized social dialogue or

concertation, aimed at the consensual planning of local initiatives for economic and

occupational development. Another form of territorial pacts introduced subsequently by

legislation were the so-called ‘area agreements’, especially targeted on less developed

areas with higher unemployment, primarily though not exclusively in Southern Italy.

While intended to mobilize local resources, these latter agreements should have involved

greater wage and labor market flexibility as well; however, sharp divisions among the trade

unions emerged on this sensitive issue. 16

The record of these forms of decentralized bargaining at the territorial level is less

impressive than was originally expected. While several case studies (Bolocan, Pasqui and

Perulli, 2000; Ballarino et al., 2001; Barbera, 2001; Regalia, 2003) have shown stories of

success, the overall attempt to decentralize tripartism and to broaden its scope has been

hampered not just by divisions among unions and by insufficient resources provided by

local institutions. More importantly, employers have in most cases been lukewarm

16 Especially the Cgil has always been concerned that acceptance of substandard conditions as concerns

wages and employment conditions, however targeted to the less developed areas and conceived as

experiments of limited duration subject to monitoring and possible revocation, may end up being a “Trojan

horse” fostering wider deregulation.

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DSLW WP 2/2009

participants and have generally not cooperated actively to ensure success. The main reason

is that they have in most cases seen territorial tripartism as yet another level of bargaining,

at a time when they were becoming increasingly unhappy about the two-level structure of

collective bargaining set up by the tripartite agreement of 1993.

In fact, employers became convinced that the apparently careful distinction drawn by that

agreement - between the issues to be negotiated at the industry level and the ones left to

firm-level bargaining – was not enough to avoid confusion and overlappings. Curiously

enough, in a period in which average real wages in Italy were growing less than in the

other EU countries (largely an outcome of the incomes policy established by the 1993

agreement), shifting to a ‘one level of bargaining only’ 17 system became the most pressing

demand by employers, together with higher labour market flexibility. The rationale was

that the sharp drop in the inflation rate deprived industry-level bargaining of its main

content, while distributional demands stemming from increases in productivity would be

more appropriately dealt with by decentralized bargaining. While employers’ associations

demanded a shift to a ‘one level of bargaining’ system, however, not all employers could

agree on which level was to be retained. Some of them favoured decentralized bargaining

(at the firm level for large and medium companies, or at the territorial level for the small-

firm districts), but others seemed to prefer industry-level bargaining only.

More generally, the main lesson stemming from the more recent attempts at social pacts

seems to be that, as their scope broadens – not just in terms of levels of operation (national,

regional, and even local), but also of issues covered – their effectiveness seems to

decrease. In fact, such objectives as employment creation, training, labour market and

welfare reform, are far more complex and difficult to pursue in a concerted way than

traditional incomes policies. In some cases, enlarging the number of actors involved in

political bargaining and the levels of negotiation, as we have seen can happen with

‘territorial pacts’, may be a tentative solution to this difficulty. But this solution may (and

often does) bring new problems with it, since a game with several actors is harder to play

and the outcome is more difficult to monitor. The contribution of each actor to the common

goal may be less clear to the others, and so too its responsibility for failure or its ability to

advocate success and to capitalize on it.

The outcome of these trends has been a growing loss of enthusiasm by policy-makers and

especially employers for the virtues of social pacts. It has not been difficult for the centre-

17 Namely, allowing for either industry-level collective bargaining or decentralized negotiation, but not for

both.

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DSLW WP 2/2009

right Berlusconi government to capitalize on this widespread feeling and to state that,

while tripartite ‘social dialogue’ remains the preferred method in Italian industrial

relations, their ‘modernization’ must continue even in the absence of the trade unions’

agreement and indeed by overcoming their resistance.

3.2.2 The conditions for institutionalization and its failure

A quick look at table 1 shows that tripartite negotiation in Italy has been a widely used

method in the last 30 years, with a peak, however, in the mid-1990s. Is frequent recourse to

social pacting an indicator of its success or rather of failed institutionalization?

The distribution of social pacts over time shows that the first experiences in the late 1970s

and early 1980s were disappointing and led the actors to abandon tripartite concertation for

quite some time. The two tripartite agreements of 1992 and 1993, however, were generally

greeted as very successful in reaching their goals as well as the latent function to

institutionalize the highly voluntarist system of industrial relations in Italy. This very

success of the ‘method’ of concertation accounts for all actors’ greater willingness to rely

on it as a consensual and effective mode of governance. In 1995, 1996 and 1998 social

pacts were tried again in different policies areas. But their effectiveness declined, and they

slowly turned into little more than symbolic action, indicating all actors' willingness to

cooperate towards the achievement of public goods – until even their symbolic value was

seriously undermined by CGIL’s withdrawal from the 2002 Pact.

We shall now briefly elaborate on this cycle, with the 1993 agreement clearly being the

turning point, to then discuss the conditions for the institutionalization of social pacts that

the Italian experience suggests. On the whole, the reorganization of the bargaining system

undertaken by the 1993 agreement appears to have been successful. At the level of the

system’s general performance, a study of wage dynamics and various macroeconomic

indicators (Birindelli and D’Aloia, 2001) has pointed out the following (see table 2 in the

Annexes): first, that the July agreement contributed to wage restraint by helping to

rebalance the economic accounts; second, that, at the same time, the agreement made it

possible to defend the purchasing power of wages 18 ; third, that the pay differential between

the manufacturing sector and protected ones like the public services and the public utilities

(electricity, gas, water) tended to be reduced; fourth, that business profitability tended to

increase in the 1990s and was particularly high in 1998 and 1999, also because of modest

18 Or at least it did so until 2000, when the resumption of inflation widened the gap between the real and

planned inflation rates on the basis of which wage increases had been fixed by industry-level collective

bargaining since the 1993 agreement.

40


DSLW WP 2/2009

increases in the cost of labor, which rose less than productivity; and finally, that wage

restraint contributed to the stability of employment during the first half of the 1990s and

subsequently to its growth. And in fact, according to ISTAT, the National Statistics Institute,

since March 2001 the unemployment rate finally returned to below the 10% threshold.

More generally, in the recent history of labour relations in Italy, the revival of concertation

in the 1990s, and in particular the tripartite agreement of 1993, are widely seen as marking

the beginning of a new phase in which many of the features distinctive of the previous

period have been superseded: i) the low level of regulation and formalization (or the

marked informality) of procedures and of relations among highly organized actors; ii) the

consequent instability and unpredictability of practices and the frequent recourse to

conflict in order to redefine power relations and also to bolster support for the interest

organizations; iii) the frequent and haphazard oscillation between centralization and

decentralization of labor relations and collective bargaining, and the difficulty of

deliberately activating processes of rationalization and reform (reorganization indeed

comes about, and often on joint agreement, but it occurs on an informal and pragmatic

basis and has little visibility and social recognizability).

As a result of the tripartite agreements of the 1990s, labour relations for a while seemed to

be moving in the direction of: i) the greater formalization and explicit definition of shared

criteria, rules and procedures for representation and for the joint resolution of distributive

conflict (incomes policy); ii) greater predictability of practices and the close coordination

of objectives and outcomes, with a substantial reduction of industrial conflict; iii)

definition of a more stable and more orderly two-tier bargaining structure – with a

centralized level and a decentralized level – and the undertaking of a series of significant

reforms (of public-sector employment, of the pensions system, of the labor market) with

the participation of the social partners.

And yet, in the first decade of the new millennium, the system has proved to be less well-

consolidated than foreseen. On the one hand, the factors responsible for the success of

centralized concertation either attenuated or disappeared, and the endeavor to create arenas

for local-level concertation proved more difficult than expected. On the other hand, again

apparent were the shortcomings of weakly institutionalized labour relations substantially

entrusted to the logic of agreement between the parties, rather than being regulated by

stabilizing measures of legislative type (as instead happens in Germany). The electoral

victory of a center-right government in 2001 and then again in 2008 prompted reappraisal

of many of the elements on which the previous equilibrium had been based.

41


DSLW WP 2/2009

This was not the first time in which tripartite concertation in Italy seemed to be declining

in importance. In fact, it had already entered a period of crisis in the mid-1980s, after a

decade of relative success. And yet, while relationships between unions, employers’

associations and government were permeated by a sense of paralysis and adversarialism at

the central level, at that time a practice of ‘hidden micro-concertation’ grew increasingly

widespread in the periphery of the industrial relations system, especially in large firms

seeking to reorganize themselves and in small-firm areas (Regini, 1995). This was a

voluntarist and negotiated solution to the problem of flexibilizing the rules governing the

employment relationship; in many cases, it was even a genuine, though informal, co-

management of the industrial adjustment that characterized the Italian economy during the

1980s. In several firms, in fact, industrial restructuring was carried forward, not in open

conflict with the unions but in a sort of permanent discussion on the possible solutions to

problems as and when they arose. What arose in the mid-1980s, therefore, was tacit

acceptance of the existence of two distinct spheres of action: that at the central and official

level, which continued to be dominated by difficult and often adversarial relationships; and

that at the local level of the firm or the industrial district, where it was instead the search

for joint regulation, if only informal and voluntaristic, that prevailed.

In the new millennium, however, this dualism between the central and the local level

appears to be far less meaningful. Stalemate at the center can no longer be compensated by

voluntarist joint regulation at the local level.

Drawing on the Italian case in comparative perspective, we will now discuss the conditions

which seem to account for the success of social pacts until the mid-1990s 19 .

3.2.3 Insulation vs. involvement of rank and file

According to neo-corporatist theory, a ‘corporatist mode of interest intermediation’ is

characterized by a high level of organizational centralization and of associational

monopoly. The insulation from rank-and-file pressures afforded by centralization and

monopoly of representation becomes for interest organizations a ‘precondition’ for stable

participation in concertative policy-making (Lehmbruch, 1977). ‘It is mainly those union

leaderships which are highly insulated from membership pressures at the plant level which

can sustain participation in corporatist arrangements for any considerable period of time’

(Panitch, 1977, p. 82). Trade unions, in particular, must be able and willing to shift their

emphasis from representation to ‘intermediation’ of interests; a concept which includes

19 The following two sections largely draw on Regini (1997).

42


DSLW WP 2/2009

control over members' compliance with the outcomes of concertative policy-making as

much as the articulation of their demands (Schmitter, 1981).

But the more that interest organizations tried in the 1970s and 1980s to achieve these

features in order to become as stable and reliable partners in social concertation as the

Nordic ones, the more they risked a ‘crisis of representation’ which made such

concertation highly unstable. And the governments which tried to foster concertation by

providing greater state recognition and legal rights to trade unions suffering from a

representation deficit (as in France with the legislation of the early 1980s) also failed in

this attempt.

Contrary to this assumption of neo-corporatist theory, social pacts in the 1990s show that

concertation may succeed precisely when interest organizations become less centralized

and less insulated from rank-and-file pressures; and especially when workplace

representation acquires a greater role vis-à-vis the union bureaucracy. The Italian case is

emblematic from this point of view. The tripartite agreements of the late 1970s and early

1980s were made highly unstable by, among other factors, the excessive distance between

the unions' top leadership on the one hand and local officers and the rank and file on the

other (Golden, 1988). However, the agreement signed in 1993, as well as the negotiation of

pension reform in 1994-95 and the pact for employment in 1996, have been accompanied

by the creation of a new system of representation in the workplaces. This made it easier for

the unions to consult their rank and file before signing: a consultation which crucially

contributed to their legitimacy (Baccaro, 2001). In this way, the potential crisis of

representation has been channelled and controlled not by securing a legal monopoly of

representation but by mechanisms for the articulation of voice within, rather than outside

the trade unions. Also, the elections of workplace representatives held during this period

showed an unexpected and overwhelming consensus for the confederal unions engaged in

concertation, and this indirectly reinforced their legitimation to proceed along these lines.

With hindsight, it is not difficult to see why neo-corporatist theory could not explain such

developments. Its traditional assumptions on the need for specific ‘organizational

preconditions’ of concertation were undue generalizations from the features historically

developed by interest organizations in the countries which had established neo-corporatism

in previous periods. Centralization of large interest organizations, insulation from the rank

and file, associational monopoly and privileged access to the state were not features

functionally created to make concertation stable, but the outcome of historical trajectories

especially suited to the Fordist-Keynesian period. With the decline of Fordism and

43


DSLW WP 2/2009

Keynesianism, however, these features became problematic even for some of the

traditionally corporatist countries (as the Swedish case illustrates). As for attempts by

interest organizations with very different historical trajectories to imitate those features,

these were bound to produce a ‘crisis of representation’ rather than giving stability to

concertation.

4. Conclusions: the failure of institutionalisation?

In spite of the success that social pacts in Italy had in the 1990s, it is still not clear to what

extent actors are willing to regard concertation as a now institutionalized fact, one not to be

called into question whenever the economic situation or power relations change.

Although extremely important, the tripartite agreement of 1993 --- the high point of the

new concertation wave --- was just an agreement on rules; it was not a social pact which

committed the parties to common views on economic development and its priorities. To be

sure, agreement on the rules may then foster the development of such views and encourage

the emergence of a shared plan of action. Nevertheless, an agreement on rules only

provides a framework; it is not enough on its own to change the pattern of industrial

relations. And there is the risk that it will deteriorate unless filled with new content. By

‘common views on economic development and its priorities’ we do not mean the old trade-

off between employment and productivity; we refer instead to a largely shared conception

of national competitiveness which gives rise to a joint effort for the full development of the

economy and of human resources. Despite the importance of developments in the 1990s,

relationships between employers, unions and state in Italy are still a long way from

accomplishing this goal.

Why are social pacts being questioned, and why have they become increasingly ineffective

in the 2000s in Italy? Probably the main reason is that the goal of meeting the Maastricht

convergence criteria has been achieved, and as a consequence the Italian policy-makers’

ability to mobilize the social partners in pursuit of a shared objective requiring mutual

restraint has decreased. Also, since inflation appears to be more under control in the Euro

zone, the need for an incomes policy of the kind that dominated not just tripartite

agreements but more generally collective bargaining in the previous decade has become

less pressing for both governments and companies. The new imperative for advanced

political economies like Italy’s is to survive the international financial crisis and to

44


DSLW WP 2/2009

increase their competitiveness in globalized markets. It is difficult to predict the extent to

which policy-makers will be able to translate this imperative into a new national

emergency that again requires cooperative efforts by the social partners.

The end of this decade might see a new differentiation between some economies which

follow a path based on some forms of social accord, and others in which economic

adjustment is pursued more unilaterally. But the two camps may well differ from the

situation in the 1990s, with some countries shifting from one camp to the other, or

temporarily crossing the boundary and then returning to the previous camp.

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DSLW WP 2/2009

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48


Incomes

policy

Employment

Policies

Involvement

of the social

partners in

policymaking

Other issues

Bargained Laws

1977-‘79

February 1977

Elimination of

“anomalous wage

indexation

mechanisms” and

of part of the costof-living

increment

included in the

end-of service

allowance

1978 law on

vocational training;

1979 law on youth

employment

1977 law on

company

restructuring

1983 Pact and

1984 ‘San

Valentino’ Pact

Cuts to the wage

indexation

mechanism; wage

ceilings in

industry collective

bargaining; 18month

suspension

of firm-level

bargaining.

Introduction of

training/work

contracts

ANNEXES

Table 1 – Issues covered by pacts

July 1992 Pact July 1993 Pact Pensions System

Reform

1995

Abolition of the

‘scala mobile’

mechanism;

suspension of firmlevel

bargaining until

December 1993;

commitment to a

second round of

negotiation on reform

of the bargaining

structure

Pledges on

employment creation

measures

Pledge to involve the

social partners in the

drafting of the budget

law

Referral to a second

round of negotiation

on prices and tariffs.

Wage increases pegged

to the expected inflation

rate (and subsequent

adjustment to the real

inflation rate).

New bargaining

structure: two levels

(industry- and firm- or

territorial-level)

Pledges on measures to

deal with the

employment crisis;

youth employment,

active training policies

Provision for two annual

rounds of discussion

with the social partners

on incomes policy

(budget law).

Provision for assessment

of pact implementation.

Creation of the unitary

workplace union

representation structures

(RSU)

Introduction of

stricter rules on

pension

eligibility and

calculation.

Pact for

Employment

1996

Employment

creation: introduction

of temporary agency

work; reform of the

job placement

system; pledges on

the regularization of

‘hidden’ workers;

relief on

contributions and tax

to reduce cost of

labour.

Introduction of the

Area Contract

(locally negotiated

instrument for

economically

depressed areas).

Pledges on

infrastructures and

public services;

‘Christmas Pact’

1998

Expected inflation rate

fixed at the average

European inflation rate.

The bargaining system

established by the July

1993 Pact confirmed.

Measures and

undertakings to create

employment: public

investments, relief on

contributions to reduce

the cost of labour,

training.

Recognition of the

importance of involving

the social partners in

economic policy-making

and the transposition of

European directives.

Commitment by the

government to giving

greater importance to

assessment (budget law,

but also the national

action plan for

employment)

‘Pact for Italy’

2002

Continuation of the July

1992 and 1993 pacts.

‘Workfare’: reorganization

of the job placement system;

pledges to reform the social

shock absorbers;

introduction of new forms of

temporary work;

undertakings to reform

further training; temporary

and experimental measures

to promote regular

employment and the sizegrowth

of firms;

Recognition by the

government of the

importance of concertation.

Pledge to negotiate the

budget law with the social

partners.

Guidelines on tax reform;

pledges on investments in

the South (infrastructures,

fight against crime,

simplification of access to

credit)

Pact for Welfare 2007

Incentives for second-level bargaining

(contributory tax relief for production

bonuses)

Reform of social shock absorbers:

universal protection system (regardless

of company size, contract, sector).

Interventions to promote employment of

specific occupational categories: women

(fiscal incentives for part-time and

flexible working hours); young people

(measures giving access to credit; social

security measures to increase social

contributions for pensions)

Abolition of some atypical contracts;

constraints on the duration of fixed-term

contracts

Commitment to establish a place where

the social partners can meet and discuss

the reform of the social shock absorbers.

Pensions reform. Eligibility criteria

more flexible and higher benefits

(including for pensions of a charitable

nature)


Table 2 – Indicators of economic performance (1977-2007)

INDICATORS 1977 19801990 19911992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

GDP (% variation) 2.3 3.4 1.9 1.3 0.7 -0.8 2.2 2.9 1.0 2.0 1.7 1.6 3.0 1.7 0.3 0.2 1.2 0.1 1.9 1.4

Import of goods and services (% var.) 1.7 5.0 10.4 1.3 4.7 -10.3 10.2 10.4 -0.9 10.1 8.9 5.6 7.5 0.7 -0.8 0.9 3.1 0.4 4.5 4.2

Export of goods and services (% var.) 8.2 -8.3 7.0 -2.4 6.5 8.0 10.1 12.6 1.1 6.2 3.5 0.3 9.5 2.1 -3.0 -1.7 3.3 -0.3 5.2 5.2

Gross fixed investment (%var) 2.7 3.0 4.0 1.0 -1.4 -10.9 0.1 6.0 3.6 2.1 4.0 5.0 6.9 1.9 1.2 -1.8 2.1 -0.5 2.3 1.2

Household consumption (% var) 4.0 5.7 1.9 2.9 1.3 -2.6 2.2 2.2 0.8 3.3 3.0 2.4 3.1 0.7 0.0 1.1 1.2 0.4 1.6 1.3

Public debt as % of GDP 56.1 95.2 98.6 105 115 121 121 120 118 114 113 109 108 105 104 103 105 106 104

Added value (whole economy - var. %) 2.2 3.1 2.0 1.2 0.9 -0.5 2.2 2.7 1.1 2.0 1.7 1.5 3.3 2.0 0.4 0.5 1.2 0.1 1.9 1.5

Unemployment rate 7.2 7.6 11.4 11.0 11.6 9.7 10.6 11.2 11.2 11.3 11.3 10.9 10.1 9.1 8.6 8.4 8.0 7.7 6.8 7.8

Employment rate 54.4 54.9 53.3 53.3 53.1 53.1 52.2 51.8 52.1 52.3 52.9 53.7 54.8 55.9 56.7 57.5 57.4 57.5 58.4 58.7

Income from work per employee (var. %) 20.5 21.6 10.3 8.7 5.7 4.5 3.0 4.2 6.1 4.0 -1.5 2.5 3.0 3.1 2.5 3.7 2.8 2.7 3.0 1.9

Gross pay per employee (var.%) 24.9 22.1 10.0 9.0 5.1 4.3 3.0 3.7 5.2 3.4 2.7 3.0 3.2 3.5 2.5 3.3 2.9 3.3 2.8 2.1

Labour cost per product unit 1995=100 87.0 94.6 98.4100.8100.2100.0105.2106.1103.2104.4105.3108.5112.1116.3119.5116.0119.1119.4

Retail prices 1995=100 78.3 83.2 87.5 91.4 95.1100.0104.0106.1108.2110.0112.8115.9118.8122.0124.7127.1129.8132.2

Sources: our elaboration on ISTAT and OECD data.


DOCUMENT STATING EXPECTED

INFLATION RATE

Table 3 – Expected and real inflation rates vs bargained and actual wage increases

GOVERNMEN

T 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

DPEF 1992 Amato N.A. 3.2 2.5 3.0

DPEF 1993 Ciampi 4.5 3.5 2.5 2.0

DPEF 1994 Berlusconi 3.5 2.5 2.0 2.0

DPEF 1995 Dini 4.7 3.5 3.0 2.5

DPEF 1996 Prodi 3.9 2.5 2.0 2.0

DPEF 1997 Prodi 2.5 1.8 1.5 1.5

DPEF 1998 Prodi 1.8 1.5 1.5 1.5

DPEF 1999 D’Alema 1.3 1.2 1.1 1.0 1.0

DPEF 2000 Amato 2.3 1.7 1.2 1.2 1.2 1.2

DPEF 2001 Berlusconi 2.8 1.7 1.3 1.0 1.0 1.0

DPEF 2002 Berlusconi 1.7 1.4 1.3 1.2 1.2

DPEF 2003 Berlusconi 2.4 1.7 1.5 1.4 1.4

DPEF 2004 Berlusconi 1.9 1.7 1.6 1.6

DPEF 2005 Berlusconi 1.6 1.5 1.4 1.4

DPEF 2006 Prodi 1.7 1.7 1.6 1.6

DPEF 2007 Prodi 2.0 1.7 1.5 1.5 1.5

Real inflation rate 5.2 4.5 4.0 5.2 4.0 2.0 2.0 1.7 2.5 2.7 2.5 2.7 2.1 2.2 1.9 2.1 2.0

Hourly bargained wage (whole economy -

% var.)

Hourly actual wage (whole economy - %

var.)

Sources: De Novellis, Origo and Vignocchi (2002); CNEL (2004, 2006); ISTAT (2007, 2008).

4.6 2.9 2.2 3.3 4.1 4.4 2.4 1.8 1.9 2.3 2.1 2.2 2.9 3.1 2.8 2.3

5.2 4.3 3.0 3.7 5.2 3.4 2.8 3.0 3.2 3.5 2.6 3.2 2.7 2.8 3.3 2.3


Table 4 – Membership in the three major union confederations 1977-2005 (in thousands)

Total members Members excluding pensioners

Year CGIL CISL UIL TOT CGIL CISL UIL TOT Density%

1977 4.475 2.810 1.160 8.445 49.0

1978 4.528 2.869 1.285 8.682 48.9

1979 4.584 2.906 1.327 8.817 48.4

1980 4.599 3.060 1.347 9.006 3.484 2.508 1.146 7.138 49.0

1981 4.595 2.989 1.357 8.941 3.387 2.371 1.143 6.901 47.6

1982 4.576 2.977 1.358 8.910 3.267 2.287 1.143 6.688 46.2

1983 4.556 2.953 1.352 8.860 3.134 2.224 1.121 6.479 45.2

1984 4.546 3.097 1.345 8.988 3.030 2.262 1.114 6.406 44.9

1985 4.592 2.953 1.306 8.851 2.939 2.056 1.064 6.059 42.0

1986 4.647 2.975 1.305 8.928 2.825 1.967 1.046 5.838 40.3

1987 4.743 3.080 1.343 9.166 2.768 1.951 1.069 5.789 39.9

1988 4.867 3.288 1.397 9.553 2.733 2.018 1.099 5.851 40.0

1989 5.026 3.379 1.439 9.845 2.717 1.993 1.104 5.815 39.5

1990 5.150 3.508 1.485 10.144 2.724 2.023 1.123 5.872 39.2

1991 5.221 3.657 1.524 10.402 2.706 2.070 1.136 5.913 39.1

1992 5.231 3.796 1.571 10.600 2.641 2.107 1.157 5.906 39.1

1993 5.236 3.769 1.588 10.594 2.528 2.007 1.125 5.660 38.5

1994 5.247 3.752 1.594 10.593 2.455 1.909 1.123 5.489 37.8

1995 5.235 3.772 1.579 10.587 2.387 1.853 1.100 5.341 37.3

1996 5.209 3.837 1.593 10.640 2.331 1.836 1.098 5.266 36.6

1997 5.215 3.856 1.588 10.659 2.287 1.776 1.078 5.142 35.5

1998 5.249 3.909 1.603 10.762 2.301 1.739 1.082 5.122 35.0

1999 5.286 4.000 1.621 10.909 2.322 1.765 1.089 5.177 34.8

2000 5.354 4.083 1.628 11.067 2.332 1.773 1.088 5.194 34.2

2001 5.402 4.117 1.628 11.148 2.361 1.783 1.087 5.232 33.7

2002 5.461 4.153 1.651 11.266 2.399 1.788 1.093 5.281 33.3

2003 5.515 4.183 1.697 11.396 2.431 1.794 1.098 5.324 33.1

2004 5.587 4.260 1.740 11.589 2.459 1.832 1.112 5.405 33.5

2005 5.488 4.001 1.670 11.166 2.488 1.848 1.131 5.468 33.0

Sources: Regalia and Regini (1998); Giacinto (2007); ISTAT, Rapporto annuale 2004, Roma.


CGIL

Table 5 – Rsu election results (1994-1998)

1994-95 (%) 1998 (%)

TOT SEATS 48.7 41.1

TOT VOTES 48.1 36.8

SEATS IN INDUSTRY 39.9

VOTES IN INDUSTRY 36.2

SEATS IN SERVICES 66.7

VOTES IN SERVICES 66.7

SEATS IN PUBLIC ADMINISTR. 51.4

VOTES IN PUBLIC ADMINISTR. 62.6

CISL

TOT SEATS 31.1 29.5

TOT VOTES 29.5 23.3

SEATS IN INDUSTRY 29.7

VOTES IN INDUSTRY 23.2

SEATS IN SERVICES 26.7

VOTES IN SERVICES 18.9

SEATS IN PUBLIC ADMINISTR. 35.1

VOTES IN PUBLIC ADMINISTR. 26.2

UIL

TOT SEATS 16.6 18.5

TOT VOTES 17.3 17.8

SEATS IN INDUSTRY 18.9

VOTES IN INDUSTRY 18.0

SEATS IN SERVICES 13.3

VOTES IN SERVICES 11.1

SEATS IN PUBLIC ADMINISTR. 13.5

VOTES IN PUBLIC ADMINISTR. 11.1

OTHERS

TOT SEATS 3.6 10.9

TOT VOTES 5.1 22.2

SEATS IN INDUSTRY 11.5

VOTES IN INDUSTRY 22.6

SEATS IN SERVICES 3.3

VOTES IN SERVICES 3.3

SEATS IN PUBLIC ADMINISTR. 0

VOTES IN PUBLIC ADMINISTR. 0

Sources: Osservatorio unitario RSU (for 1998 data); Molina Romo (2004) (for 1994-95 data).


Table 6 – Diffusion of firm-level bargaining (1984-1996)

1984-90

(yearly average)

1991-93

(annual average)

1994 1995 1996

Propensity % (a) 35.9 19.6 10.1 12.2 22.1

Extension % (b) 54.2 34.5 19.5 26.6 32.8

(a) Percentage of local units where formal agreements have been signed; (b) Percentage of workers

covered.

Source: Bordogna (1999).

Table 7 – Firms and employees involved in firm-level bargaining in 1995-96

Firm size Total Involved in

bargaining

FIRMS EMPLOYEES

Row

percentage

INDUSTRY

Total Involved in

bargaining

Row

percentage

10-19 77.164 3.335 4.3 968.375 53.493 5.5

20-49 28.263 4.949 17.5 845.382 161.901 19.2

50-199 11.002 4.675 42.5 980.934 464.312 47.3

200-499 1.966 984 50.1 551.216 289.442 52.5

> 500 620 410 66.1 921.811 675.729 73.3

Total 119.014 14.353 12.1 4.267.718 1.644.876 38.5

Column % 60% 51.6%

SERVICES

10-19 53.162 1.244 2.3 636.018 17.807 2.8

20-49 17.102 1.635 9.6 510.072 51.409 10.1

50-199 6.872 1.372 20.0 625.789 135.422 21.6

200-499 1.189 425 35.7 352.611 123.987 35.2

> 500 892 532 59.6 1.872.188 1.231.845 65.8

Total 79.217 5.207 6.6 3.996.678 1.560.469 39.0

Column % 40% 48.4%

TOTAL

10-19 130.326 4.579 3.5 1.604.393 71.300 4.4

20-49 45.365 6.584 14.5 1.355.455 213.309 15.7

50-199 17.874 6.047 33.8 1.606.723 599.734 37.3

200-499 3.155 1.409 44.7 903.827 413.429 45.7

> 500 1.512 942 62.3 2.793.999 1.907.574 68.3

Total 198.232 19.560 9.9 8.264.397 3.205.346 38.8

Column % 100% 100% 100%

Source: ISTAT, Rilevazione sulla flessibilità del mercato del lavoro, Roma, 2004.


TYPE OF FIRM-LEVEL

AGREEMENT

Table 8 – Diffusion of firm-level bargaining in industry (%)

FIRMS WITH AT LEAST 50 EMPLOYEES FIRMS WITH 20-

40 EMPLOYEES

End of 1994 End of 1996 End of 1999 End of 2001

Firms Employees Firms Employees Firms Employees Firms Employees

No agreements 14.1 7.5 10.2 5.7 11.6 5.2 66.4 66.4

Firm-level

supplementary

agreement

(of which):

With no wage

increases

With traditional

bonuses:

85.9 92.4 89.8 94.3 88.4 94.8 33.6 33.6

0 0 0 0 0 0 10.1 10.1

64.9 35.0 42.7 26.9 25.3 19.7 9.9 9.9

- in fixed sum 60.5 32.7 39.9 25.4 22.3 17.5 8.8 8.8

- tied to

organizational

change

With performancerelated

bonuses:

4.4 2.3 2.9 1.5 3.0 2.2 1.1 1.1

21.0 57.4 47.1 67.4 53.1 75.1 13.6 13.6

- of the firm 16.8 47.9 39.0 50.0 n.d n.d n.d n.d

- of the productive

unit

Or

4.3 9.5 8.1 17.4 n.d n.d n.d n.d

- partly variable n.a n.a n.a n.a 31.6 35.3 5.5 5.5

- totally variable n.a n.a n.a n.a 31.6 39.8 8.1 8.1

Total 100 100 100 100 100 100 100 100

Source: Casadio, Lamelas and Rodano (2004).


PACTS

Table 9 – Consultation and reactions by the rank-and-file to social pacts

CONSULTATION /

REACTIONS

1983 PACT AND 1984

‘SAN VALENTINO’ PACT

CONSULTATION

PRIOR TO SIGNING

CONSULTATION

AFTER SIGNING

- After signature of the

Lodo Scotti (1983)

referendum among

workers. who approved

the confederal strategy;

- After the San Valentino

Pact. general referendum

called by the Communist

Party: result in favour of

the pact.

REACTIONS BY THE

RANK-AND-FILE

- Protests by the

autoconvocati (Brescia.

Milan. Turin) against the

wage restraint policies

adopted by the

confederations

JULY 1992 PACT - Protests by the

autoconvocati and by

factions internal to Cgil.

JULY 1993 PACT - Worker referendum:

30000 assemblies. 1.5

million voters. 68%

approved the agreement.

PENSIONS SYSTEM

REFORM 1995

PACT FOR

EMPLOYMENT 1996

-Worker referendum: 42000

assemblies; 4.5 million

voters. 64% approved the

reform

‘CHRISTMAS PACT’ 1998 - Referendum held among

workers in January 1999

‘PACT FOR ITALY’ 2002 - General referendum called

by Cgil for extension of

article 18 of the Workers’

Statute. Referendum

inquorate.

‘PACT FOR WELFARE’

2007

- Worker referendum: 5.115

milion voters. 81.62%

approved the pact

- Union leaders contested in

numerous cities.

- The protests concerned

the centralization of

decision-making by the

union confederations.

- Dissent only expressed

through the referendum:

workers at some car

factories voted against.

- No protests except during

assemblies.

- Workers in industrial

areas voted against;

- No form of mobilization

against trade-union action.

except for the referendum

campaign.

- No form of mobilization

against trade-union action

- No form of mobilization

against trade-union action

- Cgil organized a series of

general strikes against the

pact’s provisions.

- Dissent only expressed

through the referendum:

workers at some car

factories and call centres

voted against.

- No protests except during

assemblies.


Table 10 – Industrial conflict 1974-2006

YEARS NUMBER OF STRIKES EMPLOYEES INVOLVED

(000)

DAYS/HOURS

LOST

(000)

1974-79 3185 7803 15460

1980-84 1890 5330 8683

1985-89 1401 1871 2650

1990-94 936 920 1747

1995-99

2000 b

846 a 848 a 5514

966 687 6.189

2001 746 1.125 7.182

2002 612 888 6.105

2003 697 907 5.731

2004 745 709 4.890

2005 654 960 6.348

2006 549 417 3.149

(a.) yearly average.

(b.) Since 2000 data are on hours, rather than days, lost.

Sources: Regalia and Regini (1998); ISTAT (various years); Eurostat.

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