International Human Resource Management-MJ Version

FIGURE 17.2

and employment will become more evident and stringent’. It invited the social
partners in the member states to conclude wage agreements in accordance with
four general rules:

• Aggregate nominal wage increases must be consistent with price stability.


• Real wage increases should safeguard the profitability of capacity-enhancing
  and employment-creating investment.


• Wage agreements should better take into account differentials in productivity
  levels according to qualifications, skills and geographical areas.


• Wage imitation effects need to be avoided.

Subsequent guidelines said the aim should also be to reduce de facto gender
wages discrimination.
It was to support these aims that the Council of Ministers launched in
1999 the ‘Cologne process’. Basically, the ‘Cologne process’ introduced a form
of ‘macro-economic dialogue’, involving representatives of the ECB, the EU
Council, the Commission and the social partners to improve the interaction
between wage development, fiscal policy and monetary policy. The group’s
meetings, which take place twice a year, are informal and designed to ensure
that, if nothing else, the parties are well aware of each others’ position.
In the case of employment, the so-called ‘open method of co-ordination’
prevails, involving what has been described as ‘tough monitoring and a real

Industrial Relations in Europe 441

13 November 1997

17 October 1998

9 December 1998

9 December 1998

18 March 1999

18 March 1999

19 May 1999

2 June 1999

Joint contribution of the social partners to the Luxembourg

Employment summit

Joint opinion on the draft decision establishing the second phase

of the Leonardo da Vinci programme

1999 Employment guidelines – joint declaration of the social

partners to the Vienna European Council

Joint opinion on the reform of the Standing Committee on

Employment

Framework agreement on fixed-duration employment contracts

Joint declaration for the Warsaw Conference on enlargement

Declaration of the European social partners on the employment of

disabled people

Declaration of the social partners to the Cologne European Council

The results of the cross-industry social dialogue (European Commission, 2000b: 20)

(Continued)