Industrial Relations in Europe 2012 - European Commission - Europa

predominance in the use of index-based indicators, similar to the methodological approach for
consumer price indices.
The political challenge
In response to the challenge of the financial and economic crisis, European economic
governance has significantly gained importance through a series of new EU policies. As
emphasised in the Euro Plus Pact, wages and collective bargaining systems are seen as one of
the main instruments for the European coordination of economic policy. A better knowledge
of collectively-agreed wages is therefore highly relevant to understanding to what extent
overall wage developments in Europe are the result of negotiations and directly influenced by
social partners’ organisations.
According to the ECB data, during the 2000s the overall development of collectively-agreed
wages in the Euro area was relatively stable with only moderate increases. While nominal
growth rates varied between 2.1 and 2.7 per cent, there was only a minimal increase in real
wages. By the end of the decade, however, this changed: 2008 saw a relatively high increase
in nominal but a freeze in real wages followed by a relatively high increase in real wages in
2009. Since 2010 nominal wage growth was again rather moderate, leading to a significant
decrease in real wages in 2011 and 2012. To sum up, in the Euro area as a whole,
developments in collectively-agreed wages have been unproblematic both for competitiveness
and for price stability. On the contrary, minimal increases in real wages have contributed to a
rather weak development of consumer demand.
Chart 1.7: ECB indicator of negotiated wages for the Euro area, 2000-2012 (annual
percentage change)
Source: ECB, calculations by WSI
Note: real wages are adjusted by the Harmonised Consumer Price Index (HCPI)
Behind this rather stable picture for the overall Euro area, national wage developments show
some significant differences. In the period 2001-2010 the increase in nominal collectivelyagreed
wages varied between 23 per cent in Germany and 41 per cent in Spain. These
differences were much less pronounced if compared in real terms ( with a difference of only
10 percentage points). With the exception of Finland and Italy, real wage developments were
below productivity growth, leading to a further decline of the wage share and a re-distribution
from labour to capital.
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