Social pacts have long been a centerpiece of European politics. They are characterized by negotiations among government, employers, workers, and other interest groups over wages and other economic issues. With the growth of globalization, some economists have called for a reduced role of social pacts and centralized wage bargaining, to be replaced by increased flexibility in labor agreements; others argue in favor of social pacts. In this book leading European economists examine the current status of social pacts and their future. Particular focus is placed on the role of trade unions, and the positive role they can play for economic and social stability by agreeing to set wages on the basis of a target rate of inflation. This was the argument of Ezio Tarantelli, a young Italian economist killed by Red Brigades in 1985. As the European Union expands and social change accelerates, this insightful book will be of interest to all concerned with social and economic developments across Europe.

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