238239_COL0003_final cover image Erne et al 2024 9781316511633ppc_bcp
9   luglio

Europe and the commodification of public services – interwiew to Roland Erne

Roland Erne is professor of European Integration & Employment Relations at the University College Dublin School of Business and Principal Investigator of the European Research Council (ERC) Project “Labour Politics & the EU’s New Economic Governance Regime (European Unions)” at the UCD Geary Institute for Public Policy. The results of this research has been published in a book, “Politicising commodification” (downloadable here) and his presence at Istituto Ciampi was the occasion for a book launch symposium (video below the interview). We have asked professor Erne to discuss some of the results.


The book describes a shift in European integration governance from horizontal to vertical (top down, more prescriptive, etc.), can you describe this “silent revolution”?

“Silent revolution” formula was used by then Commission president Barroso speaking off the cuff after the financial crisis of 2008, to describe what was going to happen in the European governance. Was it a revolution? Yes, one from above and promoting the ideas of business interest and EU leaders. In 2007 we did a big study interviewing business and European leaders and, at the time, almost all said that even talking of governance and industrial relations in the same sentence would have been too much for the EU. The people we interviewed    \believed that you did not need European industrial relations or social policies, that the only things we needed were the common market and the monetary union and that horizontal market pressures would bring to convergence among different nations. The financial crisis showed that the creation of the common market did not create convergence but major economic imbalances that put the whole European project at risk. I remember that during a side meeting during the troika visit in Dublin a colleague challenged the troika representative saying: “These neoliberal policies do not work”. The reply was, “You are right and this is why we are here, we need a convergence by political intervention top down”. In 2011 this brought to the so called “six pack” which strengthened the Stability and Growth Pact and introduced the “Macroeconomic Imbalance Procedure” that gave European authorities the right to prescribe policy changes in areas such as employment relations and social policy which were outside direct Eu intervention. Step by step we got to the New Economic Governance (NEG).


This vertical governance brought a push towards the transnational commodification of public services. When did it start and why did it happen?

Commodifying employment relations and social services is the idea of making these things a commodity to be traded on the market. This has quantitative and qualitative implications: how much you spend for social policies is important, but also how industrial relations are organized. A good example is the push for decentralizing collective bargaining, making each individual more exposed to market forces. In public services this would mean the reorganization of funding methods linking these not to the needs but on market indicators. This is the analytical framework we have.

The problem of the new economic governance regime is not it being vertical, European laws were also asked by Trade Unions, the problem is with the way these prescriptions are made. These are done by the Commission (a branch of the executive) than discussed in a set of forums and then they are adopted by the Council of Finance ministers. The European Parliament has no say in the process. This is an important point, as in the past Trade Unions managed to get improvements to some directives thanks to the pressure on the Parliament. These prescriptions are country specific and yearly which makes it more difficult for Trade Unions and social movements to react at a European level. A directive on the increasing of pension age would create a big European Trade Union campaign against it, but because reforms are country by country in different moments, it is more difficult to unite.  Some thought that the national prescription was a good idea as there are differences among countries. This idea of differentiated integration did not work that way, prescriptions are made to countries that are behind in terms of this commodifying of public services agenda. To give an example, Germany and Italy had already approved a case-based funding for hospitals and this was replicated elsewhere, for instance in Ireland.

We looked at the new economic governance prescriptions in two phases, from the financial crisis to 2019 and then the post Covid NEG regime. The first phase is a commodifying trend especially in relation to public services and cut in spending, while the second phase is more qualitative in order to render public services more market like, to commercialize it. So, you end up with public services who are bought by big international groups – as in Firenze where ATAF was taken by French Ratp.


What are the forces behind commodification?

There is a specific European dimension and a global capitalist dimension. Capitalist economy has to keep growing and constantly conquer new markets. Therefore, public services are a good field to expand. In the past, these same services were not commodified. Today even the organization of public services becomes a side of capital accumulation. This is a global pattern. All the main national employers’ organizations did agree with the idea of vertical integration and with the new rules with the exception of the German one, which had the idea that if you make wages a European topic putting them in NEG prescription, sooner or later it won’t be only cuts but also wages increase, especially in Germany. This is what happened after Covid when the Commission realized that the reaction could not be similar to that that Europe had after the financial crisis. The “New Deal” had two components: money to member States for investment in the public sector and the minimum wage directive. There was a debate around the idea of Europe regulating wages, as an article in the European treaty says that the Eu cannot regulate wages. This was the employers’ point, which made also previous recommendation problematic, as the Trade Unions noted, and therefore this minimum wage directive was classified as a rule on working conditions.


The vertical pattern of governance also diminished the power of trade unions and social movements that tend to be organized at the national level…

Yes, and as I said before, improvements in terms of social policies should be done through the directive approach, which is more democratic and involves the European Parliament, which in the case of the minimum wage improved the Commission proposal. This is also because Trade Unions can have an impact in pressuring parliamentarians who need to get elected. A second point is related to the country-by-country approach of the NEG regime, nationalizes policy making, it is always the Commission against Nations, not a European debate, but a European government telling single members what to do.


In the book you also recall the shift after Covid, but stress that even in a more investment prone direction, the focus was on services that are mainly seen are productive (transports, water)…

The post Covid was good because it did allocate more funding, but to make the example of healthcare, the money was there for IT in hospitals and more building and restructuring, but not for nurses and doctors. The reasoning beyond this was “nurses and doctors are national competence, we can only support infrastructure”. So, the new resources were mainly for private gain and after that we have the reinstated the Stability and Growth Pact also voted by an important part of the Social democratic group, not only from the northern and frugal countries. I met the Commissioner of social affairs Schmidt on a plane and asked him a few questions which convened that any social progress made during the post Pandemic moment can be reversed.


A new Commission and parliament have just been elected. What can we expect from the new Commission and from a Parliament in which nationalistic forces are stronger than before?

The discussion on the election of a new Commission and a new Commission president should be around social policies and governance and about what extent of the next legislature does limit the reintroduction of the rules that have helped and pushed the commodification of public services and the rest of the policies we discuss in our book. The role of social democrats play, especially of those parties who have a structural relation with Trade Unions should be crucial. Will it?