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multiple strategic considerations that are tied to domestic political competition
and fall well beyond the scope of this chapter. Despite these limitations, though,
the main point remains: Europe's economic geography introduces a consider-
able amount of variation in the institutional preferences of organizations that
a priori share a common pro-redistributive ideology.
While the evidence presented so far on the preferences of organizations is
limited to trade unions and social democratic parties, a heterogeneous eco-
nomic geography generates similar effects on employers. In a series of analyses
of the responses by unions and employers' organizations to the attempts by
the Commission and the European Court of Justice to promote economic lib-
eralization through regulation, Hopner and Sch afer (
2010a
,
2010b
) find that
unions and employers tend to cluster more around “production and distribu-
tion cultures” (2010a: 27) than around ideological positions over the political
control of economic activities. In other words, employers' associations display
preferences that reflect the specificity of their local economy and not an alleged
cross-national class interest. By implication, the more heterogeneous the eco-
nomic geography of the Union, the more difficult it is for employers to converge
in a unionwide strategy. The contentions over the Service Directive offer an
illustrative case.
An attempt to reinterpret the scope of economic liberalization within the
Union, the Service Directive was an effort to fully liberalize the service provision
market in Europe. Its key principle, that of “country of origin,” was stated in
article 16 of the original proposal:
Member States shall ensure that providers are subject only to the national provisions of
their Member State of origin which fall within the coordinated field. [ ...]TheMember
State of origin shall be responsible for supervising the provider and the services provided
by him, including services provided by him in another Member State.
If applied, this clause would imply not only a higher exposure to competition
in coordinated economies but also an effective deregulation of key areas of eco-
nomic activity, both private and public. In practical terms, this would imply for
instance, that a Lithuanian private hospital could potentially open a branch in
Spain with no supervision by local authorities, and paying Lithuanian wages.
While this would have created a scenario in which continental employers could
have benefited from hiring labor at a much lower cost, reactions to the pro-
posal ranged from skepticism to outright opposition throughout continental
(Austria, Germany, France) and Scandinavian economies (Hopner and Sch afer
2010b
). France's big business organization, MEDEF, challenged the directive
as a potential source of social dumping (MEDEF
2005
). In contrast, British and
East European employers' associations were supportive of the directive. This
example illustrates how the diversity of production systems within Europe's
economic geography shapes not only the preferences of workers and unions,
but also those of employers and their representative organizations.
Overall, the results reported in
Figure 4.7
and
4.8
reinforce the claim, central
to the argument in this topic, that a disperse geography of income inequality
