To address the challenge of globalisation, Europe needs an agenda of structural reform that enables its economy to moving upwards on the ladder of innovation and productivity in order to keep ahead of the competition of low wage economies.

TUAC and ETUC however underline that structural reforms are only able to deliver more and better jobs provided:

  Reforms are balanced. Productivity and workers’ engagement in firms will suffer badly if the balance between the flexibility for firms and the security for the work force is missing. Excessive flexibility in labour markets is the worst enemy for the knowledge society. Labour market institutions such as unemployment benefits, job protection may need to be adapted but we should beware of ‘throwing the baby out with the bath water’.
  Reforms are broadly ‘owned’. Social dialogue and collective negotiations between autonomous social partners are the key to achieving balance in reforms, thereby increasing the likelihood of actual implementation of these reforms.
  Reforms are accompanied by pro- active aggregate demand policies. Improving aggregate supply and productivity needs to go hand in hand with expansionary aggregate demand policies in order to avoid the economy getting trapped in a situation of low confidence/low growth while undertaking structural reforms.

TUAC and ETUC regard price stability as a necessary but not sufficient objective. Price stability is only one dimension of a stability oriented monetary policy framework. The other dimension must be stabilising fluctuations in economic activity and the business cycle, as illustrated by the slump in growth in the Euro Area in 2001. TUAC and ETUC cannot accept the wisdom of raising interest rates in the Euro Area at a time core inflation is under control and the recovery still limited to a single engine of export demand growth.

TUAC has consultative status with the OECD and represents 66 million workers in 56 affiliated organisations in the 30 OECD countries.

The ETUC represents 81 member organisations, from a total of 36 countries in Western, Central and Eastern Europe, and 12 industry federations. All in all, the ETUC represents the interests of 60 million trade unionists at European level.

For more information, contact:
 The TUAC secretariat: tel.: 00 33 (0)1 55 37 37 37 - Email: tuac@tuac.org

website: http://www.tuac.org

 Ronald Janssen of the ETUC: tel.: 00 32 2 - 224 04 89 Email: rjanssen@etuc.org

website: http://www.etuc.org