PAY restraint has not produced a significant fall in EU unemployment, according to a report by the European Trade Union Institute (ETUI). The survey, which looks at trends in all 15 member states, also warns "that the EU's fragile social peace could collapse unless employers and politicians do more to create jobs."
The report - Collective Bargaining in Western Europe 1995-1996 - looks at recent pay deals in the context of economic development within the EU. It says productivity rose by 2 per cent in 1995, compared with 0.6 per cent in the US and Japan.
However, real wages within the EU rose, on average, by only 0.5 per cent despite inflation rates of less than 3 per cent in 11 of the 15 member states.
Despite pay restraint, EU unemployment fell by only 0.4 per cent in 1995. While this meant that the number out of work fell in most EU countries (the exceptions were Austria, Greece, Portugal and Denmark) unemployment rates "remain dangerously high, even in the countries which saw the most rapid falls".
In Spain, unemployment fell from 24.1 per cent to 22.9 per cent during 1995. In Finland, with the next highest rate of unemployment, the figure fell from 18.4 per cent of the workfotce to 17.2 per cent. Ireland's unemployment rate dropped from 15.1 per cent to 14.4 per cent.
During 1995 employment grew by only 0.6 per cent across the EU. It actually fell in Germany, Italy, Austria, Belgium and Portugal. A further net reduction in jobs is expected this year in Germany, Austria, Belgium, Poitugal, Denmark and France.
In Germany, several major unions have negotiated "Alliance for Jobs" agreements. Under these they agree to keep wage claims in line with inflation in return for commitments by employers and the government to create jobs and refrain from making redundancies "for operational reasons".
In Belgium wages have been frozen since 1993, but the unions say this will not be accepted n9xt year unless there are "genuine commitments on jobs by the employers". In The Netherlands, unions have sought increases in line with inflation, but say these could be lowered if agreements on job creation are reached.
In France, unemployment hasbeen falling despite the rash of major industrial disputes, but the prospects for the long term unemployed and young people entering she labour market have worsened. The economic recovery in the UK has not improved the position of the long term unemployed and the number of households with a jobless member is rising.
Italy has unemployment of 20 per cent in the south, despite record profits by many companies, while the purchasing power of workers has fallen, the survey says.