The Eurozone crisis has changed both the constraints that governments face when implementing structural reforms, and the sources of legitimation they have available to justify policy choices. Some authors have argued that, in light of this, governments subject to exogenous policy conditionality in Eurozone peripheral countries no longer have neither the resources available (cf. Balbona and Begega 2015) nor the necessity (cf. Culpepper and Regan 2014) to involve unions in their reforms’ coalitions and to activate processes of political exchange with them to secure their consent.
This article seeks to problematize these accounts by comparing processes of structural labour market policy (LMP) reforms in Italy and Portugal between 2010 and 2015. The article makes two main claims. First, it argues that even in the crisis context, governments retained space for strategic agency in their choice to include or exclude unions from their reforms’ coalitions. These decisions did not co-vary neatly with government partisanship, but were contingent on government’s strategic considerations regarding the legitimation they could derive from the inclusion or exclusion of unions in their reforms’ coalition at specific junctures. To justify these choices, governmental actors then used discursive strategies that either defended (in the case of Portugal) or delegitimised (in the case of Italy) unions' role in the policy process.
Second, the article argues that unions themselves could make different strategic choices about whether to adopt a negotiating stance (hence accepting involvement in reforms’ coalitions) or an oppositional stance (hence privileging contestation strategies) towards governments’ LMP reforms projects. These choices can be explained with reference to differences in unions’ ideological legacies and in the specific composition of their power resources. These factors help to account for inter-union divisions within each country in the choice of ‘boxing’ or ‘dancing’ (cf. Campos Lima and Artiles 2011) with governments.
