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thesis definitief

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thesis definitief

  1. 1. FACULTY OF POLITICAL AND SOCIAL SCIENCES DEPARTMENT OF POLITICAL SCIENCE JUNE 2014 IT’S THE WORKERS’ PARTICIPATION, STUPID ! WHY THE SOCIETAS EUROPAEA SUCCEEDED AND THE SOCIETAS PRIVATA EUROPAEA FAILED LUYCKX JEAN-MICHEL MASTER THESIS PRESENTED TO OBTAIN THE DEGREE OF MASTER IN POLITICAL SCIENCE PROMOTOR: PROF. DR.PETER BURSENS ASSESSOR : PROF. DR. PETRA MEIER
  2. 2. 2 Preface A thesis is an apotheosis of 4 years of study, I would like to express some words of gratitude: First I would like to thank my parents for their patience and the continued belief in my capacities I thank them also for their support in all my past and future projects Second, my girlfriend that supports me in everything I do and on whom I can always count Third, Prof. Jan Beyers and Prof. Peter Bursens for their help during my studies and thesis Also their willingness to help me reach my goals for my next studies Fourth, Iskander de Bruycker for offering me the possibility of working for the InterEuro-project Fifth, Prof. Dirk De Bièvre for his honest comments on my thesis And finally, Prof. Petra Meier for reading and evaluating my thesis
  3. 3. 3 1 Table of Contents Preface..............................................................................................................................................2 1 Table of Contents .....................................................................................................................3 2 Abstract ....................................................................................................................................6 3 Introduction ..............................................................................................................................7 4 History......................................................................................................................................8 5 SE and SPE: Same, Same but Different? ...............................................................................10 5.1 Same use, Same benefits .................................................................................................10 5.2 Different Minimum Required Capital .............................................................................11 5.3 Difference in establishment.............................................................................................12 5.4 Difference in ‘Seat-doctrine’ and Employee Participation..............................................12 5.5 Conclusion.......................................................................................................................14 6 The Question of Mobilisation ................................................................................................15 6.1 SE-negotiations vs. SPE-deadlock ..................................................................................15 6.2 Mobilisation.....................................................................................................................16 6.3 Research question............................................................................................................17 7 Process-Tracing......................................................................................................................19 7.1 Hypotheses and Process-tracing ......................................................................................19 7.2 Smoking-gun and Hoop...................................................................................................19 7.3 Resume on Process-tracing..............................................................................................20 8 Operationalization ..................................................................................................................20 9 Hypotheses about mobilization ..............................................................................................23 9.1 Introduction .....................................................................................................................23 9.2 Learning from the SE ......................................................................................................24 9.2.1 The SE audited .........................................................................................................24
  4. 4. 4 9.2.2 The SE in practice ....................................................................................................25 9.2.3 Learning theory ........................................................................................................27 9.3 Corporatist interest groups mobilisation..........................................................................28 9.4 SMEs interest representation capabilities........................................................................32 9.5 Hypotheses, General Overview .......................................................................................34 10 Results ....................................................................................................................................35 10.1 Evaluation ‘Learning’ Hypothesis ...............................................................................35 10.1.1 Single-loop ...............................................................................................................35 10.1.2 Double-Loop ............................................................................................................37 10.1.3 Conclusion learning..................................................................................................39 10.2 Evaluation ‘Corporatist Interest Group Mobilisation’ Hypothesis..............................39 10.3 Evaluation ‘Capacity of SMEs to organize’ Hypothesis .............................................42 10.4 General Findings: Summary and Limitations..............................................................46 11 Single Member Company.......................................................................................................48 12 Conclusion..............................................................................................................................51 13 Bibliography...........................................................................................................................53 14 Appendices.............................................................................................................................56 14.1 List of interviewees......................................................................................................56 14.1.1 Face to face...............................................................................................................56 14.1.2 E-mail.......................................................................................................................56 14.2 Interview Transcript.....................................................................................................57 15 Summary ................................................................................................................................60
  5. 5. 5 « L’EUROPE NE SE FERA PAS EN UN JOUR NI SANS HEURTS ; RIEN DE DURABLE NE S’ACCOMPLIT DANS LA FACILITE » ROBERT SCHUMAN (POUR L’EUROPE)
  6. 6. 6 2 Abstract Het ‘Societas Privata Europaea’ (SPE) is een Europees supranationaal statuut voor KMOs. Het voorstel voor een SPE werd teruggetrokken door Commissie nadat het waarschijnlijk de unanimiteit in de Raad niet ging halen. Dit is merkwaardig want het zelfde statuut, maar dan voor grote bedrijven: het Societas Europa (SE), is wel een verordening geworden. De bedoeling van dit onderzoek is om via process-tracing en de daar bijhorende interviews, te onderzoeken waarom het SE een verordening is geworden en het SPE niet. Hierbij ligt de nadruk vooral op het verschil in mobilisatie van belangengroepen tussen het SE en het SPE (meer bepaald het beschermen van vakbonden van de werknemersparticipatie). Er zijn drie hypotheses: ten eerste hebben de vakbonden geleerd van het SE en zijn ze daarom tegen the SPE. Ten tweede raakt het SPE meer de vakbonden uit corporatistische landen en daarom hebben deze meer gemobiliseerd in het SPE. Ten derde betreft het SPE de KMOs en deze hebben minder mogelijkheden om zich te organiseren in vergelijking met de grotere bedrijven van het SE. De resultaten bevestigen een ‘leereffect’ van het SE voor de vakbonden. Ook de derde hypothese, de beperkte organisatie mogelijkheden van KMOs blijkt te kloppen. De tweede hypothese is in zijn totaliteit niet bevestigd maar de argumenten voor de hypothese (o.a. vrees voor deregulatie en het grote bereik) zijn wel toepasbaar op alle vakbonden (i.p.v. alleen op corporatistische vakbonden). Als algemene conclusie kan men stellen dat de standpunten over werknemersparticipatie (het centrale thema van het SE en SPE) tussen vakbonden en Commissie alleen maar radicaler worden.
  7. 7. 7 3 Introduction On the 27th of June 2008, the European Commission (hereafter: Commission) proposed a regulation to introduce a statute for a European Private Company. The proposal for a European Private Company was named the Societas Privata Europaea-proposal or SPE-proposal. The purpose of this proposal was to set up a supranational European status for Small and Medium Enterprises (SMEs) or, put differently, a private limited liability company on the European level. A company with an SPE-statute could look like this: an e.g. German SME wants to extend its production to Belgium and France. Rather than having three different company forms in 3 Member-States (BVBA in Belgium, SÀRL in France, GMBH in Germany) one single SPE-status company could be created. In the explanatory memorandum of the Commission on the SPE, the focus is laid on the importance of SMEs. SMEs are the driving force of the EU economy: “… they account for more than 99% of companies in the European Union but only 8% engage in cross-border trade, and 5% have subsidiaries or joint ventures abroad” (COM (2008) 396/3 of 25 June 2008). The SPE-proposal fits in a broader Commission initiative, which is called the “Small Business Act.” The Small Business Act aims to promote SMEs’ growth by helping them tackle problems that impede their development. It is in the view of supporting the ‘backbone of European economy’ (SMEs) that the Commission proposed the SPE-regulation. However in November 2013 the SPE-proposal was withdrawn by the Commission because it had too many problematic issues and burdens, including co-determination. The withdrawal of the SPE-proposal can be considered surprising as there is already an existing European supranational company form: the Societas Europaea-statute or SE-statute. Indeed the SPE-proposal has undeniably a predecessor with a long legislative history. The Societas Europaea (SE) is literally the bigger brother of the SPE. Bigger in a sense that the SE is meant for bigger enterprises. The target group for an SE-statute are the ‘big’, public limited-liability companies. The SPE-proposal target group are the SMEs. The SE was negotiated for 40 years and the issues discussed during the SE are similar than those during the SPE: one of the most important issues was the question of workers’ participation or the ‘seat-doctrine’. Unlike the SPE-proposal, the SE-statute became European legislation on the 8th of October 2001. Several important big companies have changed their national legal status to the European Status (SE- status) e.g.: Allianz, Porsche, BASF, SCOR and recently Airbus. With an SE-statute Airbus was able to set up one supranational European legal statute for all its subsidiaries and branches in all Member States.
  8. 8. 8 In this research I will try to uncover, trough the method of process-tracing, how come the SPE- proposal, a similar legislation as the SE-regulation, did not become legislation. Current and completed study of the SPE is often from a legalistic or economic point of view. I think these do not suffice to completely understand the SPE-proposal. It is necessary and useful to look at it from a Political Science perspective. This perspective can uncover new and better insights of the SPE, e.g. on the mobilisation of interest groups. Also, what has not been done before, I will draw a comparison between the SPE-proposal and the legislative path of the SE-regulation. Despite the fact that there are some differences between both cases, the comparison is relevant and significant. Finally, my research focusses on a proposal that has failed to become legislation, the SPE. Most research in European law-making is based on the process of how existing legislation was established and how interest-groups were influential in this process. Not very often a research focusses on why a legislation failed. In the following, I will first sketch the history, differences and similarities between both cases. Afterwards, the focus will be on the difference in mobilisation of interest groups between the SE and SPE. This difference in mobilisation between the SE and SPE-case proved to be an important issue in the failure of the SPE. 4 History In this part, I will shortly discuss the historic gestation period of the SE and SPE. In the next part, I will discuss some similarities and differences between both cases. Both parts are relevant for understanding the context of my research. Only by accurately describing the difference between the SE and SPE I can make a valid comparison between the success of the SE and the failure of the SPE. With ‘the success’, I mean the SE-regulation and directive was approved by the Council. Failure is in this context the opposite: the proposal has (not yet) become legislation. Before the SE-statute was established in 2001, the SE was the subject of long negotiations. The issue of an SE-status was first raised in the years just after the second World War, even before the EEC was set up. It was proposed, surprisingly by the Council of Europe, as a project for “European Companies.” Only in 1965, under pressure of the French government, a group of experts was created to prepare a draft of the statute for an SE. The draft of the expert group was approved in 1970 by the Commission and was presented to the Council in 1970. It contained not less than 284 articles. Those many articles were necessary because the statute should apply independently of national rules (Lenoir, 2007). The first drafts presented the SE as the new
  9. 9. 9 “flagship of European Company Law, a completely autonomous European legal form freely floating above the national legal forms” (Teichmann, 2003). However, quickly the proposal was judged to be too ‘continental’ by several Member States, among others the Netherlands. Between the first drafts in 1970 and its entry into force in 2004, thirty years of negotiation, assessments, consultation-rounds, etc. have taken place. Two main problems arose during those 30 years: co- determination and the fact that there were no references to national law. Co-determination implies that the worker representatives are appointed to the firm's board of directors for participation in the firm's decision making process. The result was a less detailed proposal with more references to national law. An associated directive on involvement of employees1 was put into place to supplement the SE-regulation. Finally, the proposal went from 300 articles in 1975 to 137 articles in 1989 to conclude to only 70 articles in 2001. The new regulation was, in general, watered down and “…the European “Flagship” was heading for the high seas modestly equipped with exactly 70 articles”(Teichmann, 2003). The SE-regulation passed the unanimity in the Council. The SPE-proposal, however, was launched by the Commission in 2008. 2008 is fairly recent, but the idea of an SPE-form originates in the same period as the first SE-proposal. Already in 1973 the French company lawyer Jeanne Boucourechliev published a fundamental paper: “Pour une SARL Européenne”, in which she argued for a flexible form available throughout Europe besides the SE. She argued that the SE left too much to be desired for SMEs, who wanted to extend their cross-border activities. Boucourechliev found that there should also be a small, flexible and easily managed legal form besides that for big companies. Her idea slowly gained attention in Europe. In 1998, the French business confederation (MEDEF) and the research-institute of the Paris Chamber of Commerce (CREDA) launched, led by Jeanne Boucourechliev, a first draft on a statute of a “Société Fermée Européenne” (Hommelhoff & Teichmann, 2012). This draft was a purely academic exercise, but the SE regulation and directive gave a new drive to the SPE. Soon after the SE-regulation the Commission started a Feasibility Study for an SPE-proposal. In 2008, the SPE-proposal was already launched in the framework of the Small Business Act (Zaman, Schwarz, & Lennarts, 2009). The adoption procedure for the SPE is based on Art. 352 TFEU (ex- art. 308 EC) which requires unanimity. In November 2013, the proposal was withdrawn by the Commission when it was clear it would not have passed unanimity in the Council. Especially the issues of co-determination, minimal capital requirement and the seat of the SPE were a 1 Note: ‘SE-regulation’ and a supplementing ‘Employee Involvement-directive’
  10. 10. 10 significant burden. The SPE-proposal was taken into the Regulatory Fitness and Performance (REFIT) Programme. The REFIT programme systematically reviews EU legislation to see if its aims are being met efficiently and detect regulatory burdens, gaps and inefficiencies (COM(2013) 685 final of 2 October 2013). Two conclusions can be made when analysing the history of both the SE- and SPE-case. First, the idea in general of the European Company (small or large) is almost as old as the EU itself. Surprisingly it took less time to negotiate a single currency than to establish the SE. Second, the problem of co-determination is the leitmotiv in both cases. A compromise has been found for the SE; nonetheless a similar compromise was not found for the SPE. For the sake of validity, I should also mention that there is a third case in this context: the Societas Cooperativa Europaea (SCE). The SCE is, in company law, a European co-operative company. It is similar to the SPE and SE but instead of large companies or SMEs, it was created for co-operatives. The reason I have chosen not to include the SCE in my research is because there is not much to be found about the SCE. And, more importantly, was is to be found states that the SCE is very similar to the SE. It was approved not much later after the SE and the negotiations took place parallel to the SE. Including the SCE in my study will have as an outcome that I have the SE/SCE on one side, and the SPE on the other. That is the reason I did not found it relevant to include it into my analysis. 5 SE and SPE: Same, Same but Different? As mentioned in the introduction, I would like to uncover why the SE succeeded, and the SPE failed. If I want to unveil the reasons of the success and failure, I must be sure to define very carefully both cases. I have to state clearly where they differ and where they coincide. The singularities of the SE and SPE are overall very technic and legalistic. For the sake of clarity, I will only discuss the important ones for my dissertation. 5.1 Same use, Same benefits The SE-regulation and SPE-proposal have as purpose to create a supranational statute for companies governed by European company law. Teichmann and Hommelhof mention the SPE as: “… a proposal that has it place side by side with the Societas Europaea” (Hommelhoff & Teichmann, 2012). In both the SE and SPE-case there are similar arguments for introducing these legislative forms. I will start by discussing the benefits of the SE and then of the SPE.
  11. 11. 11 First, the SE-regulation has proven to enhance cross-border trade and/or intra-community mobility. Second, it encourages grouping of production factors scattered all over the common market (Lenoir, 2008). Third, the regulation creates a European label for companies engaged in cross-border trade. This ‘European Citizenship for European companies’ can serve the presence of Europe in the everyday lives of European citizens (Lenoir, 2007). The benefits of the SPE are multiple and diverse. First of all the SPE facilitates the reduction of extensive advice, consultancy and information costs incurred by SMEs that are active in more than one Member State of the EU. SMEs do not always have the budget to create subsidiaries in different Member States. For example, an SPE structure involving a French, German and Belgian SME: thanks to an SPE-statue all three companies can be formed using the same structure in terms of board structure or employee involvement. Thus saving on legal advice in the coordination of the three companies (Zaman, et al., 2009). Second benefit is the possibility for an SME to extend its growth to other Member states. Most SMEs are not making full use of the Single Internal Market (Impact Assessment, SEC (2008) 2098). In Europe, 99% of all European companies are SMEs. Moreover, SME’s account for about 70% of all the jobs in the EU (Impact Assessment, SEC (2008) 2098). According to a survey of KPMG and BusinessEurope: “40% of the SME’s see limited access to information about doing business abroad, tax issues and regulatory restrictions as the main barriers to extending operations within the EU” (KPMG & BusinessEurope, SME action day: Thinking Big!, Brussels 21 November 2007). In sum, the designated functions and advantages the SPE and SE are similar if not equal. However even if the intention and the spirit of the SE-regulation and the SPE-proposal are similar, there are some differences. I will discuss the four main differences: minimal required capital, formation, the ‘seat-doctrine’ and employee participation. Off course, there are others but the following are the most relevant for my thesis. 5.2 Different Minimum Required Capital Some of the differences are typically related to the nature of the types of companies that are targeted. The difference in minimum required is evidently the result of the inherent difference between the SE and SPE (the SPE-proposal is for SME’s, the SE is for larger companies). In the SE-regulation is stated that the capital of an SE cannot be inferior to €120,000 (minimum required capital). The minimum required capital can be higher for companies developing certain types of projects. In the SPE-proposal, a minimum capital requirement is set a 1€. The 1€ minimum capital requirement is based on the Anglo-American system. However, this has been
  12. 12. 12 explicitly opposed by, among others, Germany. Germany was afraid such low minimum capital requirement does not protect the creditors in a sufficient way. They argued that a minimum capital of at least 8000€ was needed (Guidotti, 2012). 5.3 Difference in establishment Another big difference between the SPE-proposal and the SE-regulation is the method of formation. A company with an SPE-statute can be created ‘in accordance with the regulation.' This means an SPE can be formed ex nihilo (directly). An SPE can be established, even unilaterally, directly both by physical and juridical persons. It can also be created by way of transformation, merger or division of existing national companies (COM(2008) 396 final of 25 June 2008). The SPE-proposal does not, remarkably, demand a real cross-border element (Guidotti, 2012; Kornack, 2009). Contrary to the SPE-proposal, an SE cannot be created ex nihilo, it can only be found indirectly. The SE-regulation provides four different modes of SE establishment: merger, holding, subsidiary and conversion. All four modes of formation share the necessity of a cross-border element, namely that at least two of the companies involved must be subject to the legislation of different EEA-countries. Up until now most SEs have been created by way of subsidiarity (75%) (Stollt & Keleman, 2013). 5.4 Difference in ‘Seat-doctrine’ and Employee Participation The past two differences were subject of serious discussions in the Council. However, the most controversial issues are on two related problematic issues: the registered seat and especially the workers’ participation. These discussions continue to last up to date and will continue with the upcoming proposal of the SUP (Single Member Company). I will come back to the SUP at the end of my thesis. Workers’ participation in the EU is very diverse. Some Member States have no real workers’ participation (e.g. Belgium); others have an extensive workers’ participation legislation (e.g. Germany). When putting a European wide supra-national company statute this constitutes a problem because: which level a participation will be used? A low level of workers’ participation is not suitable for e.g. Germany, it means a reduction in rights for employees. A high level of workers’ participation means the statute is not very interesting for Member States with a low level of representation. If, for example, Belgian companies want to engage in cross-border trade via a European statute, they will have to install a level of workers’ participation with which they have no experience. Moreover, it complicates their company-law landscape. The SE-statute is
  13. 13. 13 called, therefore, a ‘compromise regulation’ because a directive supplements the regulation (Stollt & Kluge, 2011). The SE-regulation is supplemented with a directive on employee participation (Council directive 2001/86/EC, 2001). In the SE-directive (regarding the involvement of employees) is stated that when the decision is taken to create an SE a Special Negotiating Body has to be created. This body has to be created by and for the employees of the different companies or subsidiaries. The Special Negotiating Body (SNB) and the competent organs will negotiate and try to find an agreement on arrangements for the involvement of the employees within the SE. ‘… The SNB and the competent organs of the participating companies shall determine … arrangements for the involvement of employees within the SE’ (Council Directive 2001/58/EC, 2001). This de facto means that an SNB has to be, obligatory, set up in all companies that want to register as an SE. The SNB will negotiate the level of participation in a certain enterprise with the management. However in practice this is almost never the case, I will explain this in (9.2.2). A part of the compromise to protect the level of workers’ participation in the SE-case is the use of the ‘before/after’ principle. This principle is applicable if no agreement with the SNB was possible. A company, with the so-called ‘before/after’ principle, is obliged to grant participation rights at board level only if the employees had such rights before. The ‘before/after’ principle originates form the Davignon Group report of 1997 on workers’ participation. The principle is explained by Lenoir as follows: “it protects employees at the origin of the SE against any reduction in the rights to participate they would have before becoming employees of the SE” (Lenoir, 2007). Some scholars argue this is an improvement of the workers representation in Europe. The SE-regulation has been labelled by Lenoir and by Stollt & Kluge as a step forward in workers’ participation rights. They argue that now workers’ participation is in the Lisbon treaty, this was not the case in the past. The real innovation is the fact that the SE- directive contains provisions for a legally binding procedure of company level negotiations (SNB). “Thus it can be said that the SE-legislation- … - represents a milestone in the field of European legislation, even with regard to employee involvement” (Lenoir, 2007; Stollt & Kluge, 2011). In sum, general European level standards on co-determination law were not possible. Instead and as a compromise, employee-participation was assigned to an agreement between the company and its employees (bargaining). (Hommelhoff & Teichmann, 2012). While proposing the SPE the Commission did not keep in mind the long negotiations about workers’ participation in the SE. The general principle is that the SPE is subject to the employee participation rules of the Member States where it has its registered office. So there are no mandatory negotiations before the formation of the SPE. Only when there is a transfer of the
  14. 14. 14 registered office to a country with fewer workers’ participation the above mentioned before/after principle is applied. This means the rights of employees cannot be reduced when transferring the registered seat. Concerning this ‘seat-doctrine,' in the SE-regulation it is stated that: ‘The registered office of an SE shall be located within the Community, in the same Member Sate as its head office’ (Council regulation 2001/2157/EC, 2001). The European legislator has clearly opted to apply the ‘real seat’ theory requiring that the statutory seat (registration) and head office (seat of the management) must be the same. In contrast, the ‘registered office’ theory allows companies to be governed by the law of the country of their choice by choosing their place of registration while having their head office or even their activities in another State (Lenoir, 2007). The SPE-proposal is based on the registered office theory. The proposal provides the possibility that an SPE’s registered office and central administration could be separated and put into different Member States. Under this provision, an SPE could, right from the start, set its registered office where no co-determination exists (e.g. the UK). At the same time, it could establish its central administration offices in e.g. Germany, where extensive legislation on workers’ participation exists. With this manoeuvre, the formed SPE avoided the workers’ participation laws of Germany. The decision of the Commission for the registered seat doctrine can be explained by recent judgements of the European Court of Justice (ECJ). In the “Centros” ruling of 9 March 1999, the ECJ condemned the refusal of the Danish government to register a subsidiary of a British company on that grounds that it did not have any activity in the United Kingdom and was seeking to bypass the formalities required for creating companies in Denmark. This jurisprudence, followed by other decisions of the same kind, profoundly transformed the legal landscape by establishing the freedom of movement of companies in Europe, something which had hitherto been theoretical rather than a reality (Lenoir, 2007). The free movement of companies is the practical outcome of the registered seat-doctrine. 5.5 Conclusion Besides explaining the advantages and the similarities of the SE and SPE, four main differences have come up: minimal required capital, formation, the ‘seat-doctrine’ and employee participation. I have presented them as separate but, in fact, these four main differences are linked to each other. The main concept or issue is workers’ participation. A consistent fear of Member States with well protected workers’ participation is the escape of this participation by companies.
  15. 15. 15 Companies can, by using other - supranational or foreign - statute, escape the workers’ participation legislation of a Member state. Moreover the SPE-proposal applies the registered office theory. A possible consequence is that an SME has its registered seat in the UK; ergo it has no workers participation. However it can have its administration or activities in Germany. Conclusion: the company avoided the German workers participation (Krause, 2012). Moreover, it can do this ex nihilo, meaning that is does not need another foreign company or subsidiary. The companies can set this up with limited risks as the minimum required capital is only 1 €. In my opinion, the previous historical overview and characteristics description show that SE- and SPE-case are illustrative for the problem of further European integration and the completion of the single market. “The SE raises questions of policy and principle that affects the very conception of European construction” (Lenoir, 2007). The intertwining between the single market economic interests, social policy and e.g., industrial relations culture, make further integration (as the SPE) extremely complicated. However, progress is possible (e.g. SE-case). 6 The Question of Mobilisation 6.1 SE-negotiations vs. SPE-deadlock Most legal and economic research on this topic, though far more extensive, limits itself to the previous (Guidotti, 2012; Kornack, 2009; Teichmann, 2003; Zaman, et al., 2009). They describe the features of the SE and/or SPE and conclude e.g. that the SPE-proposal failed ‘because of the lack of consent on workers’ participation’ (Kornack, 2009) or “the discussion on the minimum required capital was problematic for the SPE-proposal” (Zaman, et al., 2009). What most of these articles neglect is that the same discussions were also prominent during the SE- negotiations. It took 30 years to come to a compromise on e.g. workers’ participation. So, how come that the same ‘cleavages,’ that were solved and compromised during the SE, proved to be the cause of failure of the SPE? The SPE-proposal did not get a chance to be negotiated, like the SE, for more than 30 years. When analysing the histories of both cases, I remarked that the SE-proposal was adapted four times before becoming legislation. As I mentioned in (3), it went from 284 articles to only 70 articles in the final legislation. Moreover, the SE-statute was never withdrawn so abrupt by the Commission as the SPE-proposal. The Commission withdrew the SPE-proposal in November 2013, and there is no prospect of an
  16. 16. 16 amended, new version2 . For now the SPE is wound up and is not likely to come back in the near future. The least one can say is that there is a difference in approach, in the SPE-case. Many possible explanations can be analysed: difference in the political space, other policy- makers, different geopolitical realities, other institutional setting, etc… All these reasons can be explored as valid explanations for the failure of the SPE. However several scholars mention the extensive mobilisation as one of the core-factors of the failure of the SPE. 6.2 Mobilisation The effect of mobilisation on these cases has not yet been researched but are nevertheless named as the primary cause of failure for the SPE-proposal by different authors (Krause, 2012; Zaman, et al., 2009). “The SPE-project was blocked in the Council of Ministers mainly by Germany. The German government adopted the rejection of the German trade-unions and implemented this at the European level with a Soviet like “njet” thought to have been dispensed with long ago” or “The German trade-unions do not intend to concede to the European legislator any loopholes to avoid co-determination” (Hommelhoff & Teichmann, 2012). The biggest fear of the trade-unions is the fear of ‘participation-shopping’. It consists of companies choosing the type of company that is the most accurate and suited to avoid workers’ participation. The SPE could give these companies a new tool to do ‘participation-shopping’. Off-course workers’ participation is not the only problem; also minimum required capital, the ‘seat-doctrine’ and the difference in establishment are serious issues for the trade-unions. However, as shown in (4.5) these are all linked to each other and especially to the workers’ participation-question. In sum, as mobilisation played an important role, I will focus my research on the difference in mobilisation between the SE and SPE. Still, one can critically question: what if there was no mobilisation on the SPE-proposal, would it not have been voted off anyway in the Council? It is difficult to answer this question but the recent coalition agreement in Germany (2013) states clearly that a European supranational status for SMEs should be the objective: ‘Im Interesse mittelständischer Unternehmen setzen wir uns dafür ein, eine Europäische Privatgeschellschaft (Europa-GmbH) zu schaffen’. But with respect for the national laws on workers’ participation: ‘Wir warden dabei sicherstellen dass die nationalen Vorschriften über die Mitbestimmung nicht umgangen werden’ (German coalition agreement, Deutschlands Zukunft gestalten, p. 18). 2 There is a proposal coming up Single Member Company (Societas Unius Personae (SUP)), on which I will elaborate at the end
  17. 17. 17 The fact that the SPE is still a German priority but has been rejected in current shape endorses (besides the literature) the possible importance of mobilisation. Germany was, and this is confirmed by the Belgian permanent representation, the biggest opponent of the a SPE-statute in the Council. In general, my thesis is not just illustrative for the problems modern day Europe faces, it is also a good case-study of interest groups mobilisation. It is in the context of ‘interest-groups mobilisation’ that I will formulate my research(-question). 6.3 Research question The previous makes it clear that the SE and SPE-case are cases that touch upon many aspects of European decision-making (single market, social policy, company law harmonisation, interest- group mobilisation, …). Defining why the SPE failed and the SE passed is, therefore, a global and comprehensive research. The ‘problem statement’ is: why did the SPE failed if the SE succeeded. However the research-question will limit itself to the mobilisation. I will focus my research on the mobilisation of interest-groups and the workers’ participation topic. Although this is a piece of the puzzle, it is a consistent piece of the puzzle (Hommelhoff & Teichmann, 2012; Krause, 2012; Teichmann, 2003). If I answer how the mobilisation differed in the SE and SPE- case and how workers’ participation played a role, I have unravelled a great piece of this SE/SPE- puzzle. In sum, in the subsequent research I will focus on the following research-question: WHY DID, IN THE SPE-CASE, THE MOBILIZATION OF INTEREST GROUPS DIFFER FROM THE SE-CASE? Note that this research-question fits in the broader context of “Why did the SE became a legislation and the SPE not?”. This research-question is specifically related to the SE and SPE- case, but can have some generalisations. For other similar cases, e.g. the upcoming single member company, my research can be a reference. To answer the research-question, I have come up with three hypotheses. I will elaborate extensively on these hypotheses in (7), after I elaborated on the methodology. Below is a schematic overview of the research question:
  18. 18. 18 ? Subject of Research SPE-proposal Regulation SE-proposal Regulation Mobilisation of interest groups Other factors Political will Trade-unions learned from the SE-regulation and mobilized extensively against the SPE- proposal. The unions in the corporatist countries mobilized more extensively against the SPE- proposal. The SME-interest representation is not as organized as the big firm lobby. They did not manage to mobilize as effectively as the big companies did in the SE-case. Mobilisation of interest groups Environmental Circumstances Figure 1 Schematic Overiew Research-Question
  19. 19. 19 7 Process-Tracing 7.1 Hypotheses and Process-tracing For a total understanding of why the interest group mobilization differed in both cases I work with three hypotheses. These are shortly stated in the schematic summary above. The hypotheses I formulated are based on readings on the subject. The three hypotheses give three different reasons of why the mobilisation was different during the SE and SPE. If (some of) these hypotheses are confirmed, I can draw my conclusions about the difference in mobilisation. I use my hypotheses to prove a causal inference between mobilisation and the failure of the SPE. The use of hypotheses to prove a causal inference is called the method of: ‘process-tracing’. George & Bennett state that process-tracing is a “method [that] attempts to identify the intervening causal process - the causal chain and causal mechanism - between an independent variable (or variables) and the outcome of the dependent variable” (George & Bennett, 2005). Alternatively, as Mahoney puts it in his article on process-tracing: “Process-tracing can be used as a method for evaluating hypotheses about the causes of a specific outcome in a particular case.” Practically this means that if I compare the SE and SPE-case I would like to know how come one passed, and the other failed. As explained in the past, several factors can be identified as the cause of the failure of the SPE. A difference in mobilisation from the SE-case is a very significant one. If I find out why the mobilization differed then, I can make some assumptions about the SE/SPE-case. I have three hypotheses for explaining “why the mobilization differed.” The research wonders “Was X the cause of Y in the case Z”, where you want to locate a general causal effect in particular cases. “Was the difference in mobilisation the cause of failure of the SPE in the SE/SPE-case? By investigating these hypotheses, let’s call it the mechanism M, I can draw conclusions about the interest mobilization and ergo about the SE/SPE (on the subject of interest mobilization). The mechanism M is defined as “a set of hypotheses that could be an explanation for some social phenomenon” (Hedström & Swedberg, 1998). If X is the difference in mobilization of interest groups, and Y is the success and failure of SE/SPE. Then the mechanism M is the causal inference that is necessary for the result. 7.2 Smoking-gun and Hoop Process-tracing is a widespread and used often as technique in Political Science. Major concepts of process-tracing are the ‘smoking gun test’ and ‘hoop test.’ These are (two of the) specific tests in process-tracing that can help the researcher establish that a specific event or process took
  20. 20. 20 place. The hoop test implies that a particular causal-process observation must be present for a hypothesis to be valid. This means that falling a hoop test eliminates a hypothesis, passing does not confirm it. The smoking gun test contrarily proposes that if a certain causal-process observation is present then the hypothesis must be valid. This means that failing a smoking gun test does not eliminate the hypothesis, passing does confirm it (Mahoney, 2012). Both tests can be used to evaluate hypotheses proposing that certain specific unobserved events or processes occurred. In my opinion, my hypotheses are formulated in a way that they are subject of the smoking gun test. In my thesis, I hypothesize that an unobserved cause (e.g. one of my hypotheses) had the result that there was more mobilization in the SPE-case. The consequence of passing the smoking gun test is to confirm the hypothesis. Failing it does not eliminate that the cause or the outcome exists (Collier, 2011). If the data indeed confirms that the hypothesis took place, the hypothesis is confirmed. If it is not confirmed then the hypothesis is not automatically rejected. It is possible that I have measured wrongly or not adequately my hypothesis. 7.3 Resume on Process-tracing In sum, I must be careful with my conclusions of why the SE succeeded, and the SPE failed. This is because I have an outcome (SE success, SPE failure) but no precise and observable (measurable) reasons for the outcome. An important factor is a difference in mobilisation. The difference in mobilisation can be the cause of the failure of the SPE. However, the ‘difference in mobilisation’ cannot be measured as such. Therefore, I found from the literature and readings, three hypotheses that could explain the difference in mobilisation. If (some of) these are confirmed, I can conclude the mobilisation differed between the SE and SPE-case. Subsequently I can say the SPE failed, among other reasons, because of a difference in mobilisation with the SE. This method with chains of evidence and causal inference is called process-tracing (Mahoney, 2012). 8 Operationalization The operationalization of the process-tracing method can happen through semi-structured interviews (Dür, 2008c; Tansey, 2007). This is a result of the fact that process-tracing focuses on finding causal mechanism for unobservable events, “it links causes to effect.” These causes are difficult to measure quantitatively and can, therefore, be measured more suitable in a qualitative way. That is especially the case in this research. In other research involving process-tracing
  21. 21. 21 quantitative methods can also be used. The interviews demand a high quality for an in-depth understanding of the subject and the hypotheses. Tansey mentions four uses of elite-interviewing: corroboration what has been established from other sources, establish what a set of people thinks, make inferences about a larger population’s characteristics and to reconstruct an event or set of events. Tansey explanation of the concept ‘to reconstruct a set of events’ suits the purpose of my research: “Through direct and focused questioning, researchers can reconstruct political episodes on the basis of the testimony of respondents, stitching together various accounts to form a broader picture of a complex phenomenon, and gather detailed information about the process in question. Elite interviews can shed light on the hidden elements of political action that are not clear from the analysis of political outcomes, or of other primary sources” (Tansey, 2007). George and Bennett also envisage interviews to be one the central forms of research when applying process-tracing. The elite-interviews are critical sources of information. However, the interviews are not isolated from other data sources as archival material (George & Bennett, 2005). This is also what I will try to do, apart from gaining information from my elite-interviews I read as many position papers, official EC-documents as possible. Embed my research with official documents is crucial if I want to understand all aspects of this case. The article of Tansey is a good guide on how to conduct interviews for process-tracing. When selecting which people I would interview I kept the advice of Tansey in mind: “…, the most important issues to consider when drawing the sample are that the most important and influential actors are included in the sample and that testimony concerning the key process is collected from the central players involved. In such circumstances, random sampling will be a hindrance rather than a help as the most important actors of interest may be excluded by chance. Instead, the goal with process tracing is to reduce randomness as much as possible, and work to ensure that the identities of the most important actors are established and that they are approached directly for the interview” (Tansey, 2007). Just as proposed by Tansey I have chosen the institutions/interest-groups I want to interview very carefully. I wanted to reduce the randomness as much as possible and interview specifically the people that could have a special added value to my research. So, again as Tansey suggested, I started by contacting directly the people I knew were active in this proposal. I knew specifically which people were active thanks to the InterEuro-project of the University of Antwerp. While trying to map interest-group activity in the EU, the InterEuro-project included the SPE-case as one of the approximately 150 legislative cases. The project interviewed Severine Picard from
  22. 22. 22 ETUC3 and Pedro Oliveira from BusinessEurope4 . The project also found that UEAPME5 and EuroChambres6 were active on the proposal. I was able to contact and arrange an interview with Ms. Picard of ETUC. The contact person within BusinessEurope left the organisation and was not accessible for an interview. I went looking for a replacement for BusinessEurope and arranged an interview with somebody of EuroChambres (he preferred to stay anonymous). I knew he was active on these cases thanks to a position-paper of his organisation. I contacted the UEAPME as they are the voice of SMEs in Europe. I interviewed the ETUI, they are very active in researching the effects of the SE and the future effects of the SPE for workers’ participation. The ETUI7 , and specifically M. Stollt, created a website about workers’ participation in the EU8 . M. Stollt is as well the co-author of many books about the SE and many articles about the SE and SPE. He is an expert on the subject. I have tried to interview somebody from the DGB9 but, unfortunately, they were only prepared to answer my questions via e-mail. Via the UEAMPE, I have been able to arrange an interview with the first assistant of the President of the EESC10 (M. Malosse). The EESC is interesting because it gathers many interest- groups, and it published a positive advice for the SPE. Moreover, during my interview Luc Hendrickx of the UEAPME revealed that ‘la SPE est un enfant de Malosse.' In his career, M. Malosse pushed many initiatives to help the SMEs. Finally, I was able to contact the Commission and somebody (he prefers to stay anonymous) of the DG Markt that worked specifically on this proposal. In sum, as shown below, I conducted six face-to-face interviews. Two institutions: the EESC and the DG Markt. I conducted two interviews on the ‘right-side’: UEAPME and EuroChambres. So finally, I conducted two interviews on the ‘left-side’: ETUC and ETUI. 3 European Trade-Union Confederation (ETUC) 4 BusinessEurope is the leading business lobby group in Europe 5 European Association of Craft, Small and Medium-Sized Enterprises ( UEAPME) is an umbrella group for associations of SMEs 6 EuroChambers is the Association of European Chambers of Commerce and Industry 7 European Trade-Union Institute (ETUI) 8 www.worker-participation.eu 9 The Confederation of German Trade Unions (German: Deutscher Gewerkschaftsbund, (DGB)) 10 European Economic and Social Committee (EESC)
  23. 23. 23 Institutions ‘left-side’ ‘right-side’ the EESC ETUC EuroChambres DG Markt ETUI UEAPME (DGB*) (DIHK*) * : Only contact and questions by e-mail Besides these face-to-face interviews, the Belgian permanent representation, the DGB and the DiHK11 answered my questions via e-mail. Note that the distinctions between left- and right-side is rather arbitrary and purely for the sake of clarity. With the left-side, I mean the interest-groups that defend the well-being of employees. The right-side represents the employers. It is relevant to keep in mind that when talking about interest groups during my thesis, I limit myself to the interest groups I had contact with. These are ETUC, UEAMPE, ETUI, DGB, DIHK. These are all the main interest-groups that were active on the proposal (except for BusinessEurope who I did not interview) based on the InterEuro files, but also based on the information given by the DG Markt. I should also mention that I had many contact (via e-mail) with Prof. Dr. Christoph Teichmann of the University of Würzburg who is specialised in the SE and SPE-case. The exact interview guide is added in the appendix, together with a list of names of the people I had contact with in the previous mentioned organisations/institutions (and were willing to be cited). 9 Hypotheses about mobilization 9.1 Introduction In the previous I already elaborated on the outline of my research. I want to know how the difference in mobilisation influenced the SPE-case. As ‘difference in mobilisation’ is not directly observable nor measurable, I will have to use the method of process-tracing. By analysing the SE- and SPE-case very carefully (I have done so in (4) ) and formulate hypotheses I can draw conclusions on the difference in mobilisation between the SE- and SPE-case. The difference in mobilisation, and specifically the issue of the protection of workers’ participation is one of the core elements of the failure of the SPE. 11 Association of German Chambers of Industry and Commerce (Deutsche Industrie- und Handelskammertag (DIHK))
  24. 24. 24 In following, I will extensively discuss my three hypotheses: learning from the SE, more active mobilisation of the interest-groups of corporatist Member States and the capabilities of SMEs interest representation. 9.2 Learning from the SE My first hypothesis suggests that the trade-unions mobilised more extensively during the SPE because they learned from the SE-case. I will come back later on the concept of ‘learning’, first I will discuss why there is something to learn from the SE for the trade-unions. 9.2.1 The SE audited The SE-legislation entered into force on 8 October 2004. However it was not until March 2007 that all EEA-members had transposed the SE directive into national law. Approximately a decade later it is possible to see what implications the SE had on the corporate landscape. On 1 November 2010 a total of 658 SEs have been created (Ernst & Young, 2009). On 15 August 2012, this number rose to 1379 established SEs (Stollt & Keleman, 2013). Currently, the SE can be found in 25 of the 30 countries of the EEA. An important observation when looking at the SE, and its impact, is the very unbalanced distribution of SEs between the different Member States. The Czech Republic (63 %) and Germany (16 %) host by far the highest share of the overall number of the SEs. Besides the Czech Republic and Germany, significant home countries are the UK, Slovakia, France, the Netherlands, … The top-10 SE Member States together are home to 95% of all SEs. A significant increase in SEs can thus be observed, but a serious question mark should be placed at this increase in SEs (Stollt & Kluge, 2011). The SEs can be divided into different categories depending on some characteristics. The European Company DataBase (ECDB) is a database established and updated by the ETUI 12 . The ECDB categorizes al SEs in four distinct categories: normal, empty, shelf and UFO SEs. Normal SEs are the only SEs really having employees and conducting business activities. They must have more than 5 employees to be categorised (by the ECDB) as normal. Empty SEs are characterised by economic activity, but no employees. Shelf SEs are ‘sleeping beauties’, they have no specific business purpose. And UFO SEs are, as the term indicates, ‘unidentified flying objects’, which are hard to define (van het Kaar, 2011). The UFO SEs may sound abstract (and it is) but these SEs are the result of the reference to national law13 in the SE-regulation. Because of the reference to national law, you could say that every Member State has a different SE-from. Therefore, there 12 http://ecdb.worker-participation.eu/ 13 As mentioned in (2) and (3)
  25. 25. 25 are some weird forms as the UFO SEs. However, they are not of great importance and can/will be left aside. What is very relevant is that in 2010, the number of normal SEs was 166 (out of the 658 or ± 25%). In 2012, only 219 SEs (out of the 1379) or only 16% had been identified by the ECDB as normal SEs. The number of SEs increased significantly over the years but the share of normal SEs decreased consequently (Stollt & Keleman, 2013; van het Kaar, 2011). If I look at the number of normal SEs per country in 2012 I can see that 103 (out of 219) normal SEs are based in Germany and 45 (out of 219) normal SEs are based in the Czech Republic. Out of the past data two conclusions can be drawn. First the Czech Republic is home to many Shelf, Empty and UFO SEs. Second, the number of SEs may seem a success, when analysing them, one can conclude that very few are actual normal SEs. Between the implementations (2006) and 2012 only 219 normal SEs have been created. 9.2.2 The SE in practice I already stated that interest groups (mainly ETUC) were afraid of participation-shopping. The SPE could give enterprises the possibility to avoid workers’ participation. Well, this fear of workers’ participation avoidance originates in my opinion from the SE-case. The SE-case can be seen theoretically as a success for workers’ participation. I discussed this above in (5.4). One of the guarantee for workers-participation protection is the ‘before/after’-principle14 . This principle basically means that the system of involvement applied by the SE will be greater than any place in the companies at the origin of the SE. This has been argued to be an improvement of the workers representation in Europe (Stollt & Kluge, 2011; Zaman, et al., 2009). However, in practice the SE has not always been a blessing for workers’ participation. The setting up of an SNB is mandatory for every SE. The SNB and the management of the SE negotiate the level of participation. If no agreement is reached the standard rules apply (before/after principle). The mandatory SNB 15 was not set up in most of the currently registered SEs. Only in 8% of cases are the setting up of an SNB known to have taken place. The key reason for this low number lies in the high share of SEs set up by way of subsidiarity SE, which, can have no employees at the moment of founding (Stollt & Keleman, 2013). Shelf, empty or UFO SEs have at the moment of founding no employees, ergo no SNB is possible. In the case of normal SEs, this picture looks better. In 105 (of the 219, ± 48%) SEs, an SNB was set up. However, this is at the very least not as much as was required by the employees’ association ETUC (Cremers, Kluge, & Stollt, 2010). This is the core of the problems the SE face today: the 14 As explained in 5.4 15 Special Negotiation Body (SNB) explained in 5.4
  26. 26. 26 SE has been used by companies in some cases to ‘freeze’ the existing participation status and reduce the size of the supervisory board. The reason for the impressive success of the SE in the Czech Republic have long remained largely unexplained. In recent years, it became obvious that the SE has developed into an alternative company form for the Czech national company-statute. An alternative company form that can be a threat to existing involvements rights (Cremers & Carlson, 2013). The previous is rather theoretical and does not really show what the ‘freezing’ of employee participation mean. In the following, I will give a concise example of 2 large German companies that changed into an SE and the consequences for employee-participation. First Allianz, the German financial services provider turned into an SE in 2006. Allianz adopted the legal form of an SE by merging with its Italian subsidiary RAS. The supervisory board has been reduced from 20 to 12 members. The employee side is composed as follows: Germany (4), France (1), United Kingdom (1). The percentage of board-level representation stays the same, it is still 50% (10 out of 20, 6 out of 12), however the board size is reduced. The second example of an SE company is GfK; it had 1/3 of the members of the board who were employees before the conversion into an SE. That was because it was close to, but under 2000 employees. A company in Germany with more than 500 employees has to have 1/3 of employees as members of the board. A company with more than 2000 employees has to have 1/2 of employees as members of the board. In the case of further growth and employment, GfK would have had to introduce employment representation on a parity base. Put differently, if it had exceeded the 2000 employees it would have to allow 1/2 of employees in the board. By converting to an SE, it had a chance to preserve its 1/3 seat distribution. During the negotiations with the SNB, GfK agreed to enlarge the size of the supervisory board. There are now 4 instead of 3 employee representatives (out of 10 board members) (Rehfeldt, 2013). The prior is also confirmed in the (extensive) research of Eidenmüller et al., the results of their research show that: “our respondents named co- determination as a factor for 29 out of 49 SEs. Additional support for H2 [Countries with mandatory worker co-determination rules exhibit more SE formations] comes from the fact that negotiations on employee involvement in the SE produced some very creative outcomes: in some firms, employees acceded to a smaller ‘Representative Body’ and a precise definition of its competences while the company promised a higher frequency of meetings with management and offered employee representatives improved access to work sites abroad.
  27. 27. 27 At least one firm abolished codetermination completely in exchange for a ‘social fund’ on behalf of its employees. […. ] In sum, survey responses confirm that avoiding or reducing worker codetermination plays an important role for many SE incorporators” (Eidenmüller, Engert, & Hornuf, 2009). 9.2.3 Learning theory The previous gives a clear image of the SE. In sum, the level of participation was not eradicated or reduced in the many normal cases, i.e. normal SEs. The level was ‘frozen’ in many cases, and the board reduced in size. The reduction in size of the board does not really fit the preferences is of the trade-unions. Furthermore, there are the cases of shelf, empty and UFO SEs of which nobody knows the purpose. Overall the SE is not the success, trade-unions hoped it to be. There is no employer-participation in other European Member States that had previously no participation like the trade-unions hoped to have (Rehfeldt, 2013). Instead there is a freezing of participation and weird unknown forms of SEs that can be threat to workers’ participation I conclude out of previous that the trade-unions did not get what they expected with the SE. Therefore, there is a reluctance for introducing a new form that could potentially even more complicate the European company law landscape. I can state that the trade-unions learned from the SE case for the SPE-case. This concept of learning is rather new in interest-group literature. The concept exists but mostly ‘learning of other interest-representation groups’ e.g. (Knodt, Greenwood, & Quittkat, 2011). That is why I focus on the organization literature. The trade- unions learned as an organization from the SE-case to apply this in a similar case. Argyris & Schön formulated very well how the trade-unions could have learned from the SE-case; they introduced the concept of ‘organizational learning.' Organizational learning consists of single- loop and double-loop learning. ‘When the error detected and corrected permits the organization to carry on its present policies or achieve its presents objectives, and then that error-and- correction process is single-loop learning. Single-loop learning is like a thermostat that learns when it is too hot or too cold and turns the heat on or off. The thermostat can perform this task because it can receive information (the temperature of the room) and take corrective action. Double-loop learning occurs when error is detected and corrected in ways that involve the modification of an organization’s underlying norms, policies and objectives’ (Argyris & Schön, 1978) In single-loop learning, an organization modifies its actions according to the difference between expected and obtained outcomes. It detects a problem (another outcome) and tries to solve it. In my research this means the trade-unions realise the SE is not ‘the pinnacle of workers’
  28. 28. 28 participation in Europe’ as Van het Kaar puts it (van het Kaar, 2011). The trade-unions will try to rectify the inequalities or biases of the SE. With double-loop learning, the organization questions the values, assumptions and policies that led to the actions in the first place. If the organization is able to modify those, then second-order or double-loop learning has taken place. The organization is looking at what has past and tries with feedback to determine what when wrong. Double loop learning can be described as: ‘the learning about single-loop learning’. In SE/SPE- case, the trade-unions have realised workers’ participation is in ‘danger’. They learned that workers’ participation must be protected and that they should be careful when harmonisation of any kind occurs. Therefore, the mobilisation during the SPE was much more contentious. The previous laboured introduction can be formulated in the following hypothesis: H 1: GERMAN AND EUROPEAN TRADE UNIONS LEARNED FROM THE SE-REGULATION, SPECIFICALLY ON THE ISSUE OF WORKERS’ PARTICIPATION AND MOBILISED EXTENSIVELY AGAINST THE SPE-PROPOSAL. 9.3 Corporatist interest groups mobilisation The first hypothesis is the result of extensive research of the literature on the review of the SE. The second hypothesis is based on a reflection of which Member States blocked the SPE-proposal. The Belgian permanent representation in Europe confirmed Germany, Austria and Sweden were the biggest opponents in the Council for an SPE-statuteaqqa<q. These are all Member States with a corporatist tradition. I can argue that in corporatist member-states the trade-unions are more cautious with the SPE than with they were with the SE. First of all, corporatism can be defined as the institutionalized integration of privileged organized interests in policy making and implementation (Christiansen et al., 2010). I can argue that the SPE forms more than the SE, a threat to the ‘institutionalized integration of privileged organized interests in policy making.’ The interest-groups from corporatist Member States are thus characterised as a privileged interlocutor with the government and able to intervene in policymaking. Öberg et al. focusses in their research if governments and interest groups are trustworthy actors in corporatist exchanges. They argue a credible exchange partner needs to have the opportunity, means and motive or put differently: mandate and unity, assets and intent (Öberg et al., 2011). First the mandate means the government, on the one hand, must be in control over a set of
  29. 29. 29 policies. The political power may devolve because of transfers of competences to the European level. Europeanization has affected the functioning of the corporatist democracy, including the autonomy of national governments. On the other hand, the interest groups must have a mandate to speak on behalf of its members. In Europe there is a continuing downgrade of membership of trade-unions in corporatist Member States (Visser, 2006). The main assets of an interest group in its exchange with government is the number of members it can persuade to accept deals struck over public policies. Many members of e.g. a trade union vote for the same political parties. This is an important bargaining benefit when talking to the government. The political loyalty is also in decline in corporatist Member States (Oswald, 1985). Assets also imply that governments must have means to supply advantageous policies to interest organizations to persuade them to engage in exchanges. The intent is the willingness of the government to engage in a corporatist exchange (Öberg, et al., 2011). I argue that the SPE-statute forms an important threat to the power of trade-unions in a corporatist country. First, the level of corporatism is also an indicator for the level employee- participation in a country. Siarrof made a classification of corporatist countries in the world. In Europe he classified Austria, Germany, Norway, Sweden, the Netherlands and Belgium as corporatist countries (Siaroff, 1999). Al these countries are characterised with a relative high degree of workers’ participation. Among others; Germany, Netherlands and Austria have workers-representation in the private and public owned companies. Non-corporatist countries like Italy, Spain, Portugal or Poland only have some kind of representation in state-owned companies. The only exception is Belgium; Belgium is a corporatist country with a relative high level of power for the trade-unions. However, they have a low level of workers’ participation. France is for Siaroff a ‘problematic’ case just as Switzerland. It is hard to categorise France but France passed new legislation in 2013 that has greatly extended the range of companies covered by the obligation to have employee representatives at board level. Not only state-owned and privatised companies which were previously included, also very large private companies must in future have at least one employee representative at board level. The connection between corporatism and workers’ participation has not yet been researched, but I assume that this link is not coincidental. The former explains why trade-unions from corporatist Member States could have been more active on the SPE-case then they were on the SE-case. There is a matter of competitive deregulation. In the European environment of economic integration and fragmented regulation, member states will face pressures to adjust national regulations to make them more attractive to industry. At the extreme, this process of regulatory competition among member
  30. 30. 30 states can create a regulatory ‘race to the bottom,’ in which Member States competitively deregulate in an attempt to remain attractive to mobile capital. In order to generate such a race to the bottom, moreover, capital does not need to actually move across national borders; it must only threaten credibly to do so, thereby provoking anticipatory deregulation by Member States (Streeck, 1996). “Competitive deregulation in the internal market is a game that no country can hope to win, but from which none is able to withdraw unilaterally” (Scharpf, 1996). This statement can also be applied on the SE/SPE case. In the SE-legislation competitive deregulation has been avoided with the application of the ‘real-seat’ doctrine. However, the chances of competitive deregulation with the SE have been deemed possible. It is plausible that the emergence of the SE company will put pressure on the Member States that have mandatory employee involvement in the decision process. For instance, employee engagement could be reduced to situations where the decision of the company explicitly affects the well-being or utility of the employees or where the interests of other stakeholders are seriously at stake (McCahery & Vermeulen, 2005; Rose, 2007). In the SPE-proposal, different from the SE, the ‘registered-seat’ is applicable. This means that competitive deregulation could occur if the SPE-proposal were to become a regulation. Because of the registered-seat doctrine companies can shop around Europe to find their most suitable regime. This is true for tax, environmental law and also for workers’ participation rights. Instead of an ‘upgrade’ in workers’ participation rights, you might get a ‘downgrade’ because of competitive deregulation as Streeck explained. The fact that the SPE-proposal is for SMEs creates an even bigger fear of trade-unions of competitive deregulation. SMEs account for 99% of the companies in Europe. The SE is meant for big companies that account only for 1% of the total amount of companies. The relocation of larger companies (subject of the SE) is for a certain extent inevitable. Today big companies shift their place of production all the time. EU Member States try to attract enterprises by providing subsidies, tax holidays and other specific types of support. The European competition law limits these. By creating a status for big enterprises (the SE), the Commission responded to the needs of larger companies that deal all the time with cross-border activities. The SE-status was an answer to a worldwide ongoing trend (Galgóczi, Keune, & Watt, 2006). For the trade-unions of corporatist states, it was a matter of adapting the SE-proposal as much as possible in their advantage. The SE was a window of opportunity for the trade-unions to harmonise on e.g. workers’ participation. This harmonisation was necessary because relocation was continuously occurring. With the SPE, this is different. The Commission states in her explanatory
  31. 31. 31 memorandum that the potential for cross-border trade was not yet fully used in Europe: “ SMEs account for more than 99% of companies in the European Union but only 8% engage in cross- border trade and 5% have subsidiaries or joint ventures abroad” (COM (2008) 396/3 of 25 June 2008). The proposal has as a meaning to facilitate this cross-border trend for higher economic growth. The difference with the SPE is that the SE responded to a given fact and trend. The SPE wants, in a way, to create that same ‘given fact and trend’. Harmonisation of workers’ participation rights in SMEs across Europe is not what trade-unions from corporatist Member States are waiting for at the moment. It is only in their disadvantage as the large extent of SMEs do not deal with cross-border mergers. The level of participation would only be inferior in the potential SPE-regulation to existing law in corporatist Member States. The SPE-proposal could create a statute that could be used by SMEs instead of the national statute. The SMEs could choose between a statute with high workers’ participation or relative low level of participation. This explains why the SPE-proposal faced a severe ‘njet’ of the trade-unions. To conclude; the SPE-proposal touches upon certain characteristics of the corporatist state. The harmonisation of workers’ participation rights across Europe touches upon the mandate the government of a corporatist Member State has. A new statute that could be used as an alternative to the national statute is a risk for the workers’ participation in a country. Once it is a regulation it cannot be renegotiated with the national trade-unions. It is no longer a mandate of the state. It also touches upon the mandate of the interest group. If the SPE-proposal becomes a regulation a potential large part of the national core policies trade-unions deal with (workers’ participation) becomes a part of the European acquis. The SMEs account for 99% of businesses in Europe, the risk of losing the mandate there is not worth taking for corporatist trade-unions. Moreover, there is the loss of members of the Unions. This means the assets are also diminished . Extremely, a mandate that becomes more narrow and the assets that diminishes could be a threat to the intent of the government. The past showed that for trade-unions in corporatist Member-States, the SPE- proposal imposes only threats. So if the SE was an answer to existing problems with relocation, the SPE-proposal is not and can create instead of solve problems concerning e.g. workers’ participation in Europe.
  32. 32. 32 The following hypothesis can be formulated: H 2: IN CORPORATIST MEMBER STATES THE SPE-PROPOSAL COULD MEAN, MORE THAN WITH THE SE-REGULATION, LOSS OF POWER FOR THE TRADE-UNIONS. THEREFORE, THE UNIONS FROM THE CORPORATIST MEMBER STATES MOBILISED MORE EXTENSIVELY AGAINST THE SPE-PROPOSAL. 9.4 SMEs interest representation capabilities The third and last hypothesis is linked to the nature of the SE and SPE. As reiterated couple of times, the SMEs are the target of the SPE-proposal, the SE targets large companies. In the SE- case, the companies involved are large (resourceful) companies. These companies have been able to mobilize very efficiently over the years in Europe. My hypothesis is that the SMEs were not as successful in organizing their interests. It is often argued that the business, as a relatively concentrated interest with relative small number of actors, has an easier time mobilising across national boundaries than labour. Streeck argues that the industry is better organized and better resourced at the EC level then competing interest groups such as the labour, environmentalists, consumers and women’s groups (Streeck, 1991). Also, Coen concludes in his article the big firms have direct access to the Commission. He labels the positions of firms in the public policy process as ‘prominent’ (Coen, 1997). Coen & Dannreuther compared the Europeanization of large and small business representation: “…the problems of representing embedded SME interest at the European level are starkly illustrated when described in comparison to large firms. In resource dependency terms, the representation of small businesses is heavily disadvantaged by its ability to organise in ways that larger businesses, with their clear and internally defined interests and Brussels offices, do not experience…” (Coen & Dannreuther, 2002). When I compare the history of large and small business representation this ‘ability to organise’ becomes clear. Already in 1958 the big businesses created the Union of Industrial and Employers' Confederation of Europe (UNICE). This permanent representation in the EU was ‘Voice of Business in Europe’, in 2007 they changed their name into BusinessEurope but their slogan staid the same. The big businesses realised the potential economic significance of the Single Market and started to organise their interests. The most visible expression organisation of interests was the European Round Table of Industrialists (ERT) in 1984. It brought together 17 of Europe’s largest industrialist with the prime objective of lobbying the creation of the European Single Market (Coen, 1997). In 1985,
  33. 33. 33 the Commission published a comprehensive blueprint and timetable for welding together the fragmented national markets to create a genuinely frontier-free Single Market by the end of 1992. Cowles argues that the ERT played an enormous role in setting the agenda for the Single Market. She argues that for the first times CEOs of big companies organised themselves to address European policy matters publicly in order to set the agenda for a Single Market (Cowles, 1995).The permanent presence of the big businesses in the EU became evident and today the number of offices in Brussels of big firms is almost uncountable. The SMEs interest representation, on the other hand, did not Europeanize automatically as the big businesses did. They needed the support of the Commission to sponsor two ‘contact groups.’ These two contact groups, called ‘EUROGROUP’ and ‘ESME’, allowed SME representatives to work properly at a European level. However, ESME was quickly (after two years) wound up because the members stepped out. The EUROGROUP was not a big success either. UNICE also attempted to represent the interest of SME trough a separate department. However, the reality showed that the larger sector federations and big companies dominate the agenda of UNICE (Cowles, 1996). Eventually, a real lobby-group for the SMEs stood up. But, again, this was not an easy operation. UEAMPE was established in 1980; it was together with EUROPMI the voice of small businesses in the EU. EUROPMI and UEAPME merged under pressure of the Commission in 1998. However some disaffected members of EUROPMI formed a rival organisation called ESBA in 1998. The discord between UEAPME and ESBA: “revealed once again the tension in the politics of small business representations” (Coen & Dannreuther, 2002). In comparison to the access of larger business interest representatives organisations, as the stated UNICE and the Brussels office of big firms, the SMEs access was underprivileged. Coen & Dannreuther argue that: “… it has been a failure of the small business sector to organise in a way that has been seen as legitimate by the Commission and the policy-making community of the EU. This failing has essentially been in the organisational form of representation that SMEs have taken.” (Coen & Dannreuther, 2002). This is in contrast to the big European firms that Europeanized individually: the government affairs departments in firms recognised that it was no longer enough merely to monitor the progress of European directives and to present occasional positions to the Commission. Rather, successful European lobbying involved the establishment of an organisational capacity to co-ordinate potential political alliances and to develop and reinforce existing political channels. In terms of achieving a position for lobbying directly, the most effective means was to develop a broad political profile across a number of issue domains and to
  34. 34. 34 participate in the creation of collective political goods to establish a political reputation (Coen, 1998). In sum, a product of this difference in organisation capacity was (is?) the lack of one, uniform interest group for the interests of SMEs. UEAPME is now the most known lobbygroup for SMEs, but it was not until 1998 that, with the help of the Commission they were pushed to have this status. Although significantly less salient, ESBA is also a lobby group for SMEs: this illustrates the fragmentation on the side of SME interest representation. This is confirmed by Dür and Mateo, who found that the material resources are related to the extend a business association is Europeanized (Dür & Mateo, 2013). Because SMEs have fewer of these material resources, they are less able to Europeanize. If I apply the prior on my cases in my research I can see that lobbying for the SE could have been done in an uniform way. The larger firms (for which the SE is meant) have an established and streamlined way of lobbying. They are organized in an organisation that has a lot of experience (UNICE). Moreover Coen, Coen & Dannreuther and other have shown that the large firms lobby individually also. The SPE (that is meant for SMEs) on the contrary is faced with fewer resources, less experience (UNICE was founded in 1958, UEAPME in 1980), no powerful enterprises to back them up (as UNICE has the ERT). The companies of UEAMPE do not have to capabilities to lobby individually. The SPE-proposal was thus not pushed and promoted by a strong, unified corporate lobby as was the case in the SE-regulation. This can be formulated in following hypothesis: H3: THE SME-INTEREST REPRESENTATION IS NOT AS ORGANIZED AS THE LARGE BUSINESS LOBBY. THEREFORE, THE SMES-INTEREST REPRESENTATION DID NOT MANAGE TO MOBILIZE, IN THE SPE-CASE, AS EFFICIENTLY AS THE BIG COMPANIES DID IN THE SE-CASE. 9.5 Hypotheses, General Overview I have formulated three different hypotheses. One states that the trade-unions learned from the SE. The second hypothesis argues that the trade-unions of the corporatist Member States rolled out and mobilised more extensively than in the SE-case. The third hypothesis focusses on the capabilities of the SMEs to organize themselves. The interviews will help me to confirm or disconfirm the hypotheses. One should bear in mind that I try to have an overall image of the difference in mobilisation in the SE- and SPE-case. As I mentioned in the methodology part: the difference in mobilisation is
  35. 35. 35 not measurable directly. Process-tracing, i.e. my hypotheses allow me to have a good image of what the difference is. The smoking-gun test also imply that these hypotheses are not mutually exclusive, rather they complement each other. Furthermore, these three hypotheses are relevant: they originate from the literature (learning), they explain why Member States voted against (corporatism) and focus on the singularities of the two proposals (SMEs ↔ large enterprises). Other hypotheses about mobilisation can be formulated, however; I believe they will resemble the previous hypotheses. So, researching these three hypotheses allow me to draw overall conclusions but do not cover the whole aspect of difference in mobilisation both cases. 10 Results In the following section the result of my interviews together with the analysis of position papers, official documents, etc… is elucidated. I will elaborate on every hypothesis separately and draw a final conclusion after shortly discussing the upcoming proposal of a Single Member Company. 10.1 Evaluation ‘Learning’ Hypothesis Based on the organizational learning theory, the single-loop learning means that the trade-unions detected an error about the SE and corrected it. The double-loop learning means that the organisation questions the values and policies that led to the SE in the first place (Argyris & Schön, 1978). 10.1.1 Single-loop Let me begin with single-loop learning. Once the SE in place as a regulation the trade-unions realise that their goal was not attained. The workers’ participation was not brought to new parts of Europe where previously there was no participation. The workers’ participation did not grow but was frozen instead and used as a vehicle to avoid workers’ participation. Out of the 1379 SEs created in 2012, only 219 could be identified as normal SEs. The rest are for the greatest part strange and Czech forms of companies. Is the distrust in the SE noticeable in the communication and interview with ETUC? Did ETUC ‘detect an error'? Certainly they did, first of all the original position of ETUC was in favour of the SE: ‘In the view of the ETUC the European SE gives rise to new opportunities for both sides of industry. … But it is also the first opportunity for involvement of all SE employees subject to the same European standard of information, consultation and participation. This is the reason why the European trade union movement welcomed this new legislation in October 2001 as a historic achievement on the road to improved industrial democracy and civil society in Europe’ (ETUC, press release
  36. 36. 36 08/10/2004). The revision of the SE by the Commission changed the positive tone drastically and switched to a more defensive tone. In the ETUC resolution on ‘Workers participation at risk’ (what is in a name?), ETUC: ‘demands that the EU respects board-level representation in the SE, SCE and SPE.’ The ETUC congress demanded also: ‘that a legislative general framework instrument be developed to achieve better coherence in the rules on workers participation for SE and SCE companies.' (Resolution ETUC congress, 7-8 December 2011). The ETUI wrote a conference reader of 45 pages on the revision of the SE (title: Workers’ participation a ‘burden’ on the European Company?). In this report they strongly criticise the Ernst & Young report that was drawn up on behalf of the Commission: ‘the emphasis put, in E&Y report, on the supposed negative role of employee-participation contributes to conserving the myths about participation in the EU’ (Cremers, et al., 2010). The report demands a solution on the activation of shelf SEs and the ‘invitation’ to circumvention of employee involvement: ‘existing loopholes to escape participation must be addressed.’ The written evidence indicates that single-loop learning from ETUC of the SE-case, but did the interview also point to this? The answer is definitively ‘yes.’ Severine Picard of ETUC (hereafter simply ETUC) denied at first the fact that ETUC as an organization possibly learned from the SE. ETUC reiterated in the interview that they are in favour of a European wide legislation on workers participation, that is why they supported the idea of an SE very much. However, when the case of Allianz comes up, ETUC says: “it is true that in the SE the level of participation can be lower than the national legislation, but the SE introduces a European wide participation, and that is what we wanted to attain” 16 . The question ‘Is the SE a success for you?’ indicates that ETUC indeed detected some serious flaws in the SE. ETUC answered: “Well the SE is not entirely a success, we realized a phenomenon that nobody expected, many shelf SEs have been created without employees. What we are afraid is going to happen is that they are going to be sold and then activated. In the SE, there is no ‘adaptation clause’: there must be negotiation with the employees before establishing the SE, but Shelf SEs do not have employees. The SE does not say that when there are significant changes in the company the participation must be renegotiated. There is a serious gap in the legislation [Il y a un sérieux trou dans la législation], and we want the Commission to change this with a revision. They are is still hesitating to do this.” Also, according to ETUC there is: “no method of sanctioning an SE that was formed without an SNB and previous negotiations.” 16 Note: the interview was in French at the request of the interviewee, everything quoted is literally translated
  37. 37. 37 The same conclusions can be drawn from the interview with Mikael Stollt of the ETUI (hereafter simply ETUI), first: “the SE was a historic compromise, it was not a dream came true for the trade-unions but it was nevertheless the highest possible standard yet.” About the rearrangement of the board in the Allianz-case17 : “there are two ways the SE can indirectly reduce workers’ participation. The first is to lower the number of seats in the board, like in the Allianz-case. Is this a reduction in participation rights? That is a question of definition; it is certainly not a strengthening. The second way are many companies in Germany just under the 500 and under the 2000 employees changed from national company form to an SE to avoid participation, again this was not a mass-evasion but it was significant.” An example of this is the case of GfK in my hypothesis. The ETUI also denies in first instance the fact that they learned, from the SE, but many explanations lean towards learning: “First there is no mechanism to sanction an SE that did not have negotiations before the conversion. Second the SE-regulation did not foresee the ‘structural changes.' It only deals with the setting up of the SE not the evolution. ETUC did not foresee ‘what if they were no employees in the beginning’ and the company grew later on. Also, the ‘freezing’ of the employee-participation as I explained with the German companies on the edge of participation was not foreseen by the regulation. We asked the Commission to revise the regulation but they came up with a ridiculous report of E&Y and still didn’t move” The interview with ETUC and ETUI shows that there is single-loop learning, a fault was detected and tried to be rectified. 10.1.2 Double-Loop I have proof of the single-loop learning, but also the double-loop learning can be confirmed. In many position papers about the SPE, ETUC ‘strongly opposes’ the proposal for an SPE (ETUC, SPE must respect workers’ participation rights, 15-16 October 2008). Framing the possible escape of workers’ participation rights as the main issue: ‘ETUC cannot accept that the SPE- statute becomes an empty shell, avoiding the issue of employees’ participation.’ This is also confirmed in the interview. When I mentioned the SPE in the interview, ETUC answered: “it is totally absurd of the Commission to propose a legislation without any compromise on workers’ participation.” I find here that an 180° degree change of attitude of ETUC occurred compared to the SE. The SE was an ‘opportunity’ for ETUC to harmonize workers’ participation rights. Even the freezing of participation levels in some German SEs is for the ‘greater good’ of Europeanization of workers’ participation. Contrary to the latter, the SPE is not an ‘opportunity’ 17 See 9.2.2 board went from 20 to 12, but still with ½ employees on the board.
  38. 38. 38 but a threat from start. Instead of wanting to shape the European workers’ participation legislation like ETUC did with the SE, they are closing down and want to protect the national systems. ETUC states in the interview: “the SPE will be used as a substitute instead of the national status and, [en plus], we do not have a guarantee it will be used for SMEs. Also, big companies can use the SPE-status. The SPE creates just another status companies can adopt to avoid workers-participation. The SPE complicates further the European company-law landscape, and that is an advantage to the ones who take advantage of it.” The last argument (also large companies can use the status) is inspired, I believe, on the negative experience with the Shelf SEs. ETUC stated they suppose that the shelf SEs will be sold to avoid workers’ participation. The SPE brings a new form that can be used to avoid workers’ participation. ETUI confirms the double-loop learning by stating: “indeed this is maybe the learning-experience from the SE: ‘if you are not covered from the beginning you will not be covered afterwards’ this means that an SE that grows from 300 to even 10.000 employees will not be obliged to introduce board-level representation. I think this is why the DGB saw a huge potential of participation escape with the SPE” On the Shelf SEs: “the SE is a good regulation for companies like Airbus or even Allianz but there are only 100 companies that you could really categorize as appropriate for the SE. Without the German ones that just want to freeze the participation you end with 70 real SEs. All the rest of the 2000 SEs are strange and bizarre forms of companies! The ETUC did not want to introduce a status that creates even more bizarre forms”. It is clear out of the interviews; ETUC and ETUI learned from the experience of the freezing of employees and Shelf SEs. They applied it to the SPE; double-loop learning occurred. The former can in some way be confirmed by my interview with the DG Markt. The anonymous source (hereafter simply: DG Markt) confirmed that: “compared to the SE, the trade-unions were much more aggressive when mobilizing for the SPE.” The DG Markt puts the responsibility of the failure of the SPE on the shoulders of ETUC: “the proposal lacked unanimity in the council, but this is rather normal. When you look at the proposal, the trade-unions18 are responsible for pushing for European wide general rules on workers’ participation, they knew the countries like the UK and Poland would never agree with this. Ultimately trying to bury the proposal.” It is clear that the relationship between DG Markt and ETUC have gone sour. This came out also clearly of the interview with the ETUC. ETUC blames the DG Markt to want to eradicate workers’ participation in Europe: “the DG Markt believes that workers’ participation is making our companies less competitive. That is also why they proposed the SPE-proposal, it is a new 18 He never wanted to say ‘ETUC’ always some trade-unions
  39. 39. 39 attempt of the DG Markt to break down the system of workers’ participation in Europe.” The DG Markt is also blaming the workers’ participation for the lack of SEs, based on the Ernst & Young report, according to ETUC. A position that upsets ETUC, ETUC believes “workers’ participation helps enterprises do what is right.” The ETUI links in the interview very well the aspect of learning and the relationship gone sour between the DG Markt and ETUC: “the expectations at the ETUC that something good is coming from the Commission in terms of workers- rights or participation is non-existent. The Commission has a clear objective, and that is to get rid of cross-border obstacles, especially for SMEs, and sees the participation as a burden for the company and a burden to growth. All the worries the trade-unions have and the worries are indeed also based on the experience with the SE, are that if we now have the next tool [SPE], we might again have problems with participation and even bigger ones.” 10.1.3 Conclusion learning I can conclude out of the interviews that the SE still consists of some dangers and flaws like the non-sanction of not putting up an SNB, the Shelf SEs and especially the case of ‘structural changes’ (if you are not covered from the beginning you will not be covered afterwards). According to ETUC and ETUI, these have to be rectified (single-loop). That is why they are asking for a revision of the SE. The Commission is currently not willing to revise the SE. ETUC and ETUI noticed that the SPE can also be used for large enterprises. ETUC and ETUI both said literally: “the SPE can be used as ‘a new tool’ to avoid workers’ participation in Europe.” The ‘former tool’ are the Shelf SEs and the SEs that have a low amount of employees when established and increase in the number of employees afterwards. These were not foreseen by ETUC and ETUI. Moreover the compromise made during the SE (before/after) has been replaced in the SPE by a hard demand for European-wide workers’ participation legislation. As the DG Markt said, this European-wide legislation is very unrealistic. With the proposal of the SPE the perception is, with what they learned from the SE, that the Commission only proposes regulations to abolish workers’ participation (double-loop). 10.2 Evaluation ‘Corporatist Interest Group Mobilisation’ Hypothesis I hypothesised that the trade-unions from corporatist member states mobilised more extensively against the SPE. The SPE touches upon certain features of the corporatist state, especially the mandate of trade-unions in the corporatist Member States. I found that there is a connection
  40. 40. 40 between the level of corporatism and the level workers’ participation. As the SPE could start a competitive deregulation in workers’ participation between Member States (difference between registered seat ↔ real seat doctrine19 ), it touches mainly upon the system of the workers’ participation in the corporatist states. Furthermore, the competitive deregulation would occur in a policy domain that involves 99% of the companies and 70% of the jobs in the EU. Large enterprises account instead only for 1 % (the case of the SE). Lastly, the SE responded to the need of trade-unions of corporatist member states, creating a ‘window of opportunity’ and the SPE does not respond to a need, it is just seen as a threat for unions of corporatist Member States. The hypothesis would have been confirmed if I showed out of the interviews that the DGB or Scandinavian trade-unions were more active in the SE than in the SPE-case. Alternatively; that trade-unions of corporatist Member States were more active compared to non-corporatist unions. However, this was, unfortunately, not answered clearly and unambiguously. The DGB repeated that the mobilisation of trade-unions in Europe is based on solidarity and thus that a distinction could not be made on the basis of corporatism or other national characteristics. The assistant of M. Malosse at the EESC (hereafter simply EESC) confirmed this in my interview 20 : “I did not perceive a real difference between unions from corporatist and non-corporatist Member States. The point is just that the DGB is one of the most resourceful trade-unions in Europe, they also have a big office in Brussels. When the DGB mobilises many other join.” The same was true in the interview with ETUC, although ETUC did say why the DGB was so prominent in the discussion: “the SPE was important enough to provoke a general mobilisation. The DGB has very good and close contact with their government, and that is very useful for us as ETUC. We rely much on our affiliates that have good contacts with their governments like in Sweden but also in the UK when there is a government in place that respects the trade-unions. This is not the case with Cameron.” The ETUI said: “it is hard to compare the mobilisation in the SE and SPE, because they are ten years apart. You cannot compare the DGB ten years ago with the DGB now and the EU ten years ago with the EU now.” Does this mean that my entire hypothesis can be declared unusable? I believe, out of the interviews, that this is not the case. I did not take into account the ‘solidarity’ between trade- unions. The solidarity of trade-unions in Europe makes it difficult to make a distinction between trade-unions that come from a corporatist or a non-corporatist country. It is also difficult to 19 See 5.4 20 Interview was in French at the request of the interviewee

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