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Abstract

During the 1990s, a prominent strategy of economic adjustment to the challenges of competitiveness and budgetary retrenchment among the non-corporatist countries of Europe was the negotiation of social pacts. Since the onset of the great recession and the Eurozone crisis, social pacts have been conspicuous by their absence. Why have unions not been invited into government buildings to negotiate paths of economic adjustment in the countries hardest hit by the crisis? Drawing on empirical experiences from Ireland and Italy—two cases on which much of the social pact literature concentrated—this article attributes the exclusion of unions to their declining legitimacy. Unions in the new European periphery have lost the capacity either to threaten governments with the stick of protest or to seduce policymakers with the carrot of problem-solving.They are now seen as a narrow interest group like any other.