Social Pacts: A Helping Device in Euro Adoption?

Abstract

The establishment and consolidation of social partnership and the revitalisation of social pacts greatly supported the success of the changeover to the euro in several European countries in the nineties. In Central and Eastern Europe as well, there is agreement among politicians and professionals alike that the creation of a social pact with a firm and comprehensive legitimacy could support the achievement of the Maastricht fiscal reference values enormously, and by doing so, it could establish the ground for long-lasting and sustainable economic growth. However, the continental Western-style neo-corporatist industrial relations system has not sprung into existence in Eastern Europe. Consequently, it is argued here that the launch of a successful and all-encompassing social pact cannot be expected within the current political and social constellations in the region. Through the example of two Central Eastern European countries, namely, the Czech Republic and Hungary, it is demonstrated that there is a general tendency of the spontaneous transformation of industrial relations into a segmented system, which is more similar to the deregulated labour markets of Anglo-Saxon liberal market economies than to the cooperative strategies of continental Europe.