"Since the mid-1990s the German system of collective bargaining with its traditional dominance of sector-level agreements has been faced by a process of creeping ero-sion. While the bargaining coverage has shown a steady decline, a far-reaching de-centralisation has increasingly undermined the system of multi-employer bargaining.

Compared with other European countries, the development in Germany seems to be rather ex-ceptional, as many countries were able to continue with a rather stable collective bargaining system and a relatively high bargaining coverage. This holds true also for countries where - as in Germany - the unions were faced by a significant decline of organisational power. The latter indicates that there are other political factors which seem to compensate for the decline of unions' organisational power and keep their institutional power basis relatively stable.

In discussing German collective bargaining in a European perspective it is the aim of this paper to identify the factors which support a stable and encompassing collective bargaining system. Our arguments are developed in three steps: First, we describe the recent developments in German collective bargaining and the accompanying changes in the organisational and structural power of German trade unions. Sec-ondly, we compare the German situation with the development in other European countries and analyses the factors which are conducive for a stable bargaining sys-tem. Considering the different experiences in Europe, we thirdly discuss the possibili-ties for a restabilisation of German collective bargaining."

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