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The purpose of this paper is to explain why, in spite having a relatively powerful labour movement at the start of the economic transformation, Romania ended up with a highly deregulated system of industrial relations in the aftermath of the global economic crisis of 2009 and with trade unions which seem incapable to defend their interests.

The authors trace the changing role that Romanian trade unions had in national policy making and show that the beginning of 2000s represents a critical point for the power loss sustained by organised labour.

The authors argue that a key element for explaining labour’s decline is the growing pressure exercised by various international organisations for the adoption of deregulatory labour market reforms. While during the 1990s this pressure was circumvented by successive governments which peddled back and forth between union wage pressure and fiscal austerity measures, beginning with 2000s, EU accession conditionalities coupled with IMF and World Bank policy recommendations enabled the international deregulation agenda to be implemented without much opposition.

The paper brings new evidence on the impact of international actors on the Romanian collective bargaining and labour market institutions.