The politics of economic adjustment in Europe : State unilateralism or social dialogue?

This article depicts the process of design and implementation of austerity policies aimed at reducing public deficits and debt in eight European countries and the role of social dialogue in this context. It is argued that, as governments are shifting policy priorities from economic stimulus towards fiscal consolidation and debt reduction, social dialogue and tripartism are given a less prominent role compared to the first phase of the global economic crisis, during which they played a significant part in devising crisis responses. Austerity policies are presented as being inevitable and non-negotiable. This may not be surprising, considering that the current structural adjustment promoted by the international financial institutions (IFIs), and lately the European Union (EU), is based on Washington Consensus policies which usually exclude public deliberation. The chapter argues that social dialogue should remain part of policy design and implementation even in times of crisis, and highlights several ways of rebalancing the negotiating powers of actors in the real economy to enable them to influence policy choices.