POLITICISING COMMODIFICATION: European Governance and Labour Politics from the Financial Crisis to the Covid Emergency

• Title: Politicising Commodification: European Governance and Labour Politics from the Financial Crisis to the Covid Emergency
• Author(s): Roland Erne – Professor of European Integration & Employment Relations at the UCD College of Business, Dr Sabina Stan – Assistant Professor of Sociology and Anthropology in the School of Nursing and Human Sciences at Dublin City University, Darragh Golden – Ad Astra Assistant Professor in Employment Relations at the UCD College of Business, Imre Szabó – former post-doctoral researcher at UCD and currently visiting faculty at Central European University (CEU), Vienna, and Vincenzo Maccarrone – former post-doctoral researcher at UCD and currently Marie Sk?odowska-Curie Fellow at Scuola Normale Superiore.
• Published by: Cambridge University Press, October 2024
• Where to find it: https://www.cambridge.org/ie/universitypress/subjects/law/european-law/politicising-commodification-european-governance-and-labour-politics-financial-crisis-covid-emergency?format=PB

It’s an understatement at best to say that we’ve all lived through some tough times in the last 10-15 years. Financial crashes leading to economic instability, leading then to the seemingly relentless cutting and curtailing of social welfare services, and that’s not to mention the arrival of a global pandemic which stretched the already limited, overburdened services far past their breaking point.

In the face of such uncertainty, political restructuring was inevitable, but how has this impacted our lives, in areas such as social support and employment relations, and have those changes been for the better?

It’s here we meet Roland Erne, a Professor of European Integration and Employment Relations at UCD Michael Smurfit Graduate Business School – an institution he has worked at for over 20 years.

Roland is also the Principal Investigator of the European Research Council (ERC) Project ‘Labour Politics & the EU’s New Economic Governance Regime (European Unions)‘ at the UCD Geary Institute for Public Policy, making him a bona fide expert in the topic he and he co-authors have tackled in their latest release.

Together with colleagues from across UCD as well as experts from Dublin City University, Central European University Vienna and Scuola Normale Superiore, Rolande has published Politicising Commodification: European Governance and Labour Politics from the Financial Crisis to the Covid Emergency.

The book takes a European focus, examining the radical shift in EU economic governance in the years following the 2008 financial crisis, by capturing the supranational formulation of the EU’s New Economic Governance (NEG) prescriptions after this point and their uneven deployment across countries, policy areas, and sectors.

NEG, the researchers say, led to a much more vertical mode of EU integration, and its commodification agenda unleashed a plethora of union and social-movement protests, including transnationally. Their book presents findings that they state are crucial for the prospects of future European democracy.

“This is hardly a business book,” comments Roland. Instead, the contents aim to give readers a better understanding of the ongoing economic, political, and social restructuring of Europe. For policymakers and practitioners, the discussions explored within its pages can help to better shape Europe’s future direction.

The book achieves this by upscaling insights on the historical role that labour movements have played in the development of democracy and welfare states thus far, and uses these to look to the future.

We sat down with Roland to find out more…

Can you tell us about the inspiration behind your new business book? What motivated you to write it?

At a meeting of a European Central Bank (ECB), European Commission (EC), and International Monetary Fund (IMF) Troika delegation with Irish employers, trade unionists, and government ministers in December 2012, a Commission official dryly responded to a critique of the Troika’s ‘failed’ neoliberal, free-market ideology by saying; “We know that the market didn’t work. That’s why we are here”.

This observation not only became our book’s epigraph, but also motivated me to draft a successful research proposal for a €2m European Research Council (ERC) project. Labour Politics and the EU’s New Economic Governance Regime allowed us to study the radical shift in EU economic governance after the 2008 crisis; the social protests triggered by it; and their feedback effects on the EU’s economic governance prescriptions in employment relations and public services after the Covid pandemic.

What are the key takeaways or main ideas that readers can expect to find in your book?

Until the crisis of 2008, the EU’s influence on employment relations and social policies took the form of abstract horizontal market integration rather than a vertical integration of public policies under the auspices of EU authorities.

The architects of the European single market and monetary union were convinced that horizontal market pressures would bring about the desired convergence of national economic and social policies by stealth. This explains why almost all government officials and business leaders told us before the 2008 financial crisis that even the mere interest of EU authorities in employment relations under the banner of EU governance would represent too much intervention in their affairs.

After 2008 however, Europe’s business and political leaders lost faith in self-governing markets when they realised that the single market and monetary union had generated severe economic imbalances that threatened to break up the EU. Without much ado, they shook off the gridlocks that had hitherto prevented a vertical integration of EU policies in the social field and adopted a new EU economic governance regime that allowed the European Commission and Council of national finance ministers to prescribe policy changes in fields hitherto shielded from vertical EU interventions.

Since then, EU member states must participate in an annual cycle of country-specific policy prescriptions, surveillance, and enforcement.

The EU’s new governance regime mimics the corporate governance regime of transnational corporations, which manage their subsidiaries and workers by supranational key performance indicators, site-specific ad hoc prescriptions, and financial rewards or penalties. But as the EU is not a corporation but a political organisation that claims to be democratic, its shift to the new governance regime led to a severe legitimacy crisis.

This facilitated the regime’s politicisation through popular protest movements along two axes; the national–EU axis that favoured Brexit, but also a commodification–decommodification axis, pushed by social protest movements against commodifying EU governance prescriptions that tasked member states to turn labour and public services into commodities.

Who is the target audience for your book, and how do you believe it will benefit them?

The Brussel-based correspondents of national media typically focus on the personalities and careers of political protagonists involved in EU politics and their role in advancing their national interests; but what precisely those interests are is not made clear. Readers who are looking for a deeper analysis will revel in this book, which examines what former Commission President Barroso called a “silent revolution” in EU policymaking and its consequences.

Sure, the subject matter of our book is complex, delving into European law, economics, politics, and policymaking across many countries, policy areas, and economic sectors. But, precisely for this reason, we use accessible language that aims to help students, policymakers, HRM and employment relations practitioners, and trade union and social-movement activists get a better grasp of the EU’s arcane economic governance regime, as such an understanding is key if one wants to change its structure and its policy orientation.

What do you think makes this topic particularly relevant or timely in today’s business world, or for the years ahead?

The book’s 14 chapters capture the supranational formulation of EU governance prescriptions and their uneven deployment across four countries (Germany, Italy, Ireland, Romania), policy areas (employment relations, public services), and sectors (public transport, water, healthcare services), which we know very well.

The book describes the shift to a much more vertical mode of EU integration after 2008, maps the policy orientation of EU prescriptions, and documents a plethora of union and social-movement protests unleashed by the prescriptions and the protests’ feedback effects on the EU’s economic governance regime after the Covid emergency.  

Can you discuss any specific case studies or real-world examples from your book that illustrate its principles in action?

To regain popular legitimacy, EU policymakers adopted a response to the Covid pandemic that differed from the post-2008 approach. This included not only the temporary suspension of the EU’s fiscal rules, but also the adoption of new labour-friendly EU laws.

The EU Adequate Minimum Wages Directive of 2023, for example, not only sets higher EU-wide benchmarks for national statutory minimum wage levels, but also obliges member states to strengthen collective wage bargaining at sector or cross-industry level, to protect workers’ representatives from acts that discriminate against them, and to protect unions from any acts of interference by employers in their establishment and functioning.

“Sure, the subject matter of our book is complex, delving into European law, economics, politics, and policymaking across many countries, policy areas, and economic sectors. But, precisely for this reason, we use accessible language that aims to help students, policymakers, HRM and employment relations practitioners, and trade union and social-movement activists get a better grasp of the EU’s arcane economic governance regime…”

– Roland Erne

Ironically, this development would hardly have happened had key business interest groups – e.g., Business Europe and the American Chamber of Commerce – not called for stronger EU powers in national wages, collective bargaining, and social policy in response to the financial crisis.

To be sure, from 2020 onwards, US and European business leaders lobbied hard to prevent EU policymakers from adopting the 2023 Adequate Minimum Wages Directive, arguing that the EU did not have any competence in this field. But aptly, European trade union leaders simply flipped business leaders’ EU competence argument by asking EU executives the following rhetorical question: How can one say that the EU has no right to provide a framework for adequate minimum wages after a decade of constraining EU economic policy prescriptions that tasked governments to curb wages and to marketize collective bargaining mechanisms?

How does your book add to/expand existing discussions on this topic?

In summary, our book presents findings that are crucial for the prospects of employment relations, social policymaking and European democracy. It shows that labour politics is essential in framing the struggles about the direction of EU economic governance prescriptions along a commodification–decommodification axis rather than a national–EU axis.

To shed light on corresponding processes at EU level, it upscales insights on the historical role that labour movements have played in the development of democracy and national welfare states.

Can you provide some practical tips or strategies from your book that readers can immediately apply to improve their business or career?

As outlined earlier, this is hardly a business book in the sense of individual career improvement but a book about business that aims to give readers a better understanding of the ongoing economic, political, and social restructuring of Europe in order to help policymakers and practitioners across countries, sectors, and policy areas to shape Europe’s future direction.       

Finally, what book written by another author would you consider essential reading for your audience and why?

I would recommend Karl Polanyi’s “The Great Transformation. The Political and Economic Origins of Our Time”, which Penguin just republished in its Modern Classics series. When analysing any major economic crisis and the great transformations triggered by it, we must use analytical tools drawn from a great variety of disciplines (e.g., anthropology, economics, law, political sciences, sociology) as Polanyi has taught us.

This, however, does not make us Polanyists, as one might assume, given our use of his commodification–decommodification axis as a methodological tool to assess the orientation of the EU’s governance prescriptions. Although these EU prescriptions entailed unintended consequences (namely, national and transnational union and social-movement protests and the adoption of the EU Adequate Minimum Wages Directive), our analysis also shows that commodifying interventions do not always trigger counter-movements by “society” as Polanyi thought.

Once the coercive power of the EU’s economic governance prescriptions waned and as public finances recovered from the financial crisis, two new developments informed the EU’s response to the Covid pandemic. Firstly, EU executives began using EU funds as a carrot for the implementation of commodifying structural public sector reforms. Secondly, the EU’s country-specific economic policy prescriptions called for greater public infrastructure investment; however, most prescriptions urged governments to invest in productive services, such as transport and water, rather than social services like healthcare.

The linking of EU funds to the implementation of structural reforms foreshadowed the “money for reform” approach of the EU’s Recovery and Resilience Facility Regulation of 2021 and the newest EU Regulation “on the effective coordination of economic policies and on multilateral budgetary surveillance” of 2024. The latter reinstates the harsh fiscal rules that the EU had temporally suspended during the pandemic, but also allows member states more time to balance their budgets; but only if the targeted member state is implementing the structural reforms spelled out in a “national medium-term fiscal-structural plan” drafted in accordance with the EU’s country-specific economic governance prescriptions.

POLITICISING COMMODIFICATION: European Governance and Labour Politics from the Financial Crisis to the Covid Emergency was published on June 6^th 2024, and is available to buy here with a 20% discount (using the code: POCO24). A free open access e-book is also available to download here

Further information can be found via the ERC project website.

By, Georgina Tierney,

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