European Economic Integration: The Threat to Modell Deutschland

Faced by the advent of neo-liberal market forces, epitomized by the austerity character of EMU (Buda, 1998; Ferner and Hyman, 1998), Germany like other European Member States is having to contend with a radically new macroeconomic regime (Grahl and Teague, 2003).With the advance of European economic ‘integration’, a byword for production transparency, low unit costs and labour flexibility, governments and corporate interests are increasingly committed to improving economic performance by promoting a deregulation of labour markets (Marginson and Sisson, 2001; Lane, 2003). The following chapter contends that the aforementioned neo-liberal agenda is having far reaching repercussions on the dual system of employee representation, the heart Modell Deutschland. The forward march of decentralization is unsettling the historical equilibrium between plant level co-determination and sectoral collective bargaining, i.e. that a conflict of interest is occurring between works councils (WC) and trade unions. Certainly, the potential ‘historical tension’ between these two industrial relations actors cannot be ignored, with employee representation marked by the dilemma of unifying the particular (the place of work) and general (class affiliation).

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