Europe – What now? - Brussels Labour (International Branch of the British Labour Party)
Speech held by ETUC General Secretary John Monks at the Fitzmaurice Memorial Lecture in Brussels on 14 October 2009.
Thank you for the privilege of inviting me to give the John Fitzmaurice lecture this year. I honour his memory and I follow in distinguished footsteps including those of Neil Kinnock, Margot Wallström and Geoff Hoon to address an old question about where Europe might be heading in the months and years ahead, an old question but one set against a rapidly changing landscape.
I claim no special insights. I rest instead on a lifetime of commitment to trade unionism, to the cause of EU integration, and to trying to ensure that the EU is not just a single market but a project with which people in the street can identify and to which they will commit.
This, I am painfully aware, puts me at odds with most of my fellow countrymen and women, even with key leaders of the Labour Party, if not with most in this audience.
No lecture about the future can avoid taking as its starting point where Europe is now. And wherever you look there are problems.
I was listening to a French trade unionist recently who started his speech by saying – “there is not one crisis, there are three crises” – and then added rather cheerfully – “at least”. He was referring to the economic crisis, the environmental crisis and the demographic crisis, all of which make a complex mixture of short and longer term challenges for Europe, the world and individual member states.
I will put the latter two in the margins of most of my lecture – they can be the subject of future Fitzmaurice lectures. It is not because they are not important. It is always worth remembering that the costs of climate change become greater every year that effective action is not taken; and that while most European countries will experience some population decline, the population of Africa is likely to double by 2050 with profound effects on us, Africa’s northern, wealthy neighbour.
The economic crisis looms above everything. We have lost 7% of European GDP in 18 months, EU unemployment is rising, perhaps, up to 12% by the winter’s end, with young people, its disproportionate and blameless victims. David Cameron incredibly blamed big government, big Labour Government, for the crisis and the misery created by it, never once mentioning the irresponsible role played by those in financial markets. And what is more, with honourable press exceptions, he seems to be getting away with it. Is Labour incapable of attributing the full blame to the banks and the others where it rightly lies? Could it be because of a fear that Labour’s previous admiration for the workings of the City of London make it embarrassed to admit a degree of indulgence? We now know that light touch regulation with that lot was never going to be enough. Perhaps, instead, it is political weariness. Whatever it is, if Labour does not respond vigorously to the Cameron accusation that it is to blame for the recession, it will not, and cannot, succeed.
And if the idea sticks that it is all the Government’s fault, then the obvious solution is cut public spending and prune Government severely. Labour is doing the right things but its communication strategy is inadequate at the moment.
There is already wide pressure, and not just in the UK, to pronounce the end of the crisis and cut public spending. EU Finance Ministers met after the recent G20 in Pittsburgh and launched a co-ordinated exercise to plan exit strategies from the current high levels of public spending. That EU Governments act prematurely and choke off the recovery is the ETUC’s biggest worry at the present time. (A premature move by the US Congress to balance the books in 1937 killed the recovery then and the recession did not end until World War Two.) Despite general calmness in Pittsburgh about the stimuli packages, some EU Governments are clearly planning savage cuts in public expenditure.
Yet if we have a normal recovery, the debt will diminish remarkably quickly; “and if we don’t, it won’t and won’t need to” (Samuel Brittan FT Oct2). The same article quoted the 19th century British historian Macaulay, who said: “At every stage in the growth of that debt it has been seriously asserted by wise men that bankruptcy and ruin were at hand; yet still the debt kept on growing, and still bankruptcy and ruin were as remote as ever.” Some countries’ historical experience has been worse (e.g. Weimar, 1923, Iceland, 2008/9) but “don’t exit, don’t panic” must be the ETUC message to finance ministers. There is realism around. France announced that it would be 2014 before it expected to be back within the rules of the Stability and Growth Pact.
This will be a huge battle in Europe, not just in the UK, because of the clear dangers that a country which exits too early seeks to transfer its problems to its neighbours. By cutting public spending in the absence of a revival of the private sector, it places its hopes on exports to other countries which are maintaining high spending levels.
I believe that David Cameron and George Osborne are downright dangerous; they would cause a depression on the 1930s scale on the basis of what they said last week. There is a real, genuine divide between the parties on this. This is not phoney, Punch and Judy, politics. It is vital for the future that the Tory exit strategy is not implemented.
There is another European dimension to the crisis. There is an increased tendency now for countries to look for national rather than European solutions with notable current examples in the automobile and banking sectors. A senior EU official was quoted as saying the EU’s main job was to try to maintain the single market over the next five years.
In my direct field, we will be under pressure to maintain our support for the free movement of labour. We saw earlier this year strikes in Lincolnshire about British jobs for British workers, and these highlighted the risks of nationalistic responses to rising unemployment, and the problem which exists in the single market where workers from poorer countries can undermine conditions of the indigenous workers, a concept described, unattractively, in Eurospeak as “social dumping”.
It has long been the ETUC’s ambition to achieve, whether by directive or by agreement under the Social Protocol of the Maastricht Treaty, protection against social dumping and allowing workers of the EU to be undermined by another member state operating on lower standards.
But we have pursued these objectives pragmatically recognising that while there are widely varying standards of living and of productivity in Europe, uniformity on all main points was not possible. Yet the tensions in that debate are rising and there is a real risk of protectionism developing in the trade union ranks, a tension increased by recent ECJ decisions on posted workers. Running a single market with free movement across 27 national industrial relations and social security systems is not a stable arrangement and the crisis is causing yet more instability.
We are, frankly, struggling to get this point across. In part, this is due to the rightward trend in most recent elections, including those of the European Parliament. There is little sign of early effective support being possible from ‘left’ political parties. With exceptions (e.g. Austria, Portugal, Spain, Norway and now Greece), Europe’s left is failing to attract support, just as it should be in the ascendant. Yet we know that raw and unregulated free market capitalism has precipitated the greatest post-war economic crisis, but voters generally are looking either rightwards or (a minority) further left.
The British and German parties in particular are seen to have presided over the period when the crisis was brewing and a period when they championed liberalisation measures; both are currently only attracting support of around 23%. In France and Italy, if anything, the traditional socialist parties are in greater disarray.
Meanwhile some centre right politicians (e.g. Chancellor Merkel, President Sarkozy) have moved to adopt socially sensitive policies, implement tougher financial regulation to curb “Anglo-Saxon” style capitalism and to adopt an environmentalist agenda. They will undoubtedly move to cut spending and deficits, but they have responded so far to the crisis by adopting a social democratic agenda. They are sitting in the Socialist chair – apart from Mr Cameron who is spectacularly out of step with his centre right colleagues on this – as he is on the Lisbon Treaty.
By the way, if the attention – seeking President Klaus succeeds in delaying ratification of that Treaty until after the British General Election, and if the Conservatives win that election and carry through on their pledge to hold an early referendum, it will be rather late for pro-European team to start their pro-Lisbon campaign. We will have to start well before that just as soon as we know the moves of the unpredictable Klaus, and my preference is to turn it into a referendum on UK membership of the EU.
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