Most trade unions across western Europe are strong supporters of the euro. Many of their leaders believe its introduction will lead eventually to Europe-wide collective wage bargaining and help to restore the waning influence of organised labour.

"We are a vital part of the European social market model, which is under attack from right and left," says Emilio Garbaglio, general secretary of the European Trade Union Confederation. The Irish trade union movement is affiliated to the confederation but Manus O'Riordan, head of research of the largest Irish trade union, SIPTU, says that members believe the view outlined in last years NESC strategy report, "that the national bargaining framework is still the most conducive to dealing with the changes of EMU.

"I think there is going to be some development in collective bargaining on the basis of cross-country partnership but wage development will be looked at more in terms of development within national economies," he says. He believes that while the introduction of the single currency is seen as a natural development of the single market, Britain's decision not to join EMU in the first phase could threaten Irish jobs.

"If sterling came down again that could create problems for firms dependent on the British market. That could threaten our competitiveness and would be against the obligations of Britain's adherance to the European treaty," he says.

He believes that the threat of sterling volatility added urgency to the need to develop profit-sharing schemes as a form of "buffer funds to take any shock due to volatility of funds". "In their own right they would bring partnership down from the national level to a more meaningful level, to the employer/employee operating within his own firm."

Mr Garbaglio and senior union leaders are pleased at what was achieved at this summer's EU Amsterdam summit in reinforcing the role of trade unions and employer organisations in EU decision-making over employment issues.

"As a result of our two-year campaign, we have gained the opportunity to bargain at EU level," he says.

"We are taking on new responsibilities."

Measures are already in place to introduce parental leave and part-time workers' rights across the EU. Further moves are promised to establish a minimum framework of good employment practices at EU level which will complement the single currency.

Mr Garbaglio and his colleagues now want early progress on the creation of consultative works councils in all companies across the EU, as well as employee participation schemes.

Union leaders are concerned that employers are less keen on such common EU structures than on ensuring that collective bargaining remains within the borders of individual nation-states.

Renate Hornung-Draus, deputy director of the Federal Association of Employers in Germany, says the trade unions "must accept and accommodate differences" in negotiations to establish "a responsible and sensible European model".

She and other employers' leaders fear any attempt by the trade unions to "extrapolate national industrial relations systems on to a European level.

"We must resist that trend. Social agreements should not be the equivalent of collective bargaining," she says.

Otto Jacoby, head of the Frankfurt-based research body Laboratorium Europea, envisages bargaining at EU level on minimum standards to prevent downward pressure on wages and conditions.

These deals would then be transposed to national and sectoral level, with a flexible adaptation down to companies.

"What we will certainly get with EMU is much greater transparency on labour costs," explained Professor Keith Sissons at Warwick University Business School. "With a common currency, workers in different countries will be able to know more clearly what each other earns and the value of their benefits. This is bound to make an impact on bargaining," he says. Mr Jacoby thinks that, in the EMU age, organised labour will have to push forward European-minded trade unionists ready to pull down the barriers of national tradition, language and culture that divide workers within the EU.

Mr Garbaglio hopes that the EU social commission's guidelines for a common employment strategy, to go to next month's EU jobs summit in Luxembourg, will help to strengthen moves for wider industrial relations co-operation.

But as Mr Jacoby admits, if the trade unions fail to adjust to meet the EMU challenge, downward pressure will grow on wages and labour conditions in many areas, the power of employers is likely to strengthen and unemployment may remain high.

As fervent defenders of the European social market model, the trade unions have more than most to lose if the EMU project goes disastrously wrong.