Speech by John Monks, General Secretary of the European Trade Union Confederation (ETUC)

President / Acting Chairman,

it was in that momentous year of 1945 that Winston Churchill found himself addressing a large crowd in the central square of Strasbourg, two weeks after the end of the Second World War.

He commenced his speech as follows: ‘Prenez garde, un anglais commence à parler français. Prenez garde, mes braves.’ Now we meet in Strasbourg in another momentous year.

Who would have predicted a year ago that an American Republican President would have made huge public investments in private companies. In the past, the American President has viewed public healthcare as communism, but he has presided over the creation of a welfare state for banks.

Who would have thought that, after years of rejecting multilateralism, especially by going ahead with an invasion of Iraq without the support of the United Nations, this President would convene a new global effort to re-build a new international regulatory system. The inconceivable has become the inevitable.

What we are living through is a recession made in the West – not in Latin America, not in the Middle East or Africa but one made in Wall Street and the City of London and other European financial centres. France has so far been relatively undamaged but the list of European banks on public life support systems is long and getting longer.

The result is a manic fall in stock markets and, most worryingly of all for trade unions, rising unemployment and slow growth. France is already technically in a recession. The reality will soon match the technicalities.

For ETUC, the world financial crisis must be a turning point and cause a complete change in the way the financial world works. The dominant model of financial capitalism is close to collapse. This capitalism, liberated from long-standing restraints around 25 years ago, especially in the USA, has been used since as a role model for the rest of the world to follow. It has patronised the many, while it exploited them for the benefit of the few, following years of exalting privatisation, deregulation and unfettered markets.

Let us be absolutely clear. This crisis was caused by greed and recklessness in Wall Street, London and other major financial centres. Senior executives permitted speculation on a huge scale on investments they ill understood. Speculators have exacerbated the serious rises in fuel, food and raw materials.

That is why this time there must be a turning point. Never again can irresponsibility by banks and hedge funds and the rest be allowed to come close to bankrupting nations. Never again must taxpayers’ money be used to prop up institutions that continue to pay huge salaries and bonuses to their top executives. Never again can shareholder value, with directors’ bonuses linked to it, be allowed to be the sole goal of companies. We cannot risk a repeat of this gross irresponsibility, greed and negligence.

ETUC is working with the International Trade Union Confederation (ITUC) and the Trade Union Advisory Committee (TUAC) to the OECD on a trade union response to this crisis, but it is already clear to us that there need to be:

• injections of public money into financial institutions that carry with them public influence and control, thereby causing a fundamental change in behaviour;
• much tighter control of financial institutions’ ability to leverage their operations, by strengthening the ratios of solid assets to liabilities;
• an international, certainly European, level of effective regulation. This is necessitated by the scale of global financial capitalism which now transcends most individual nations;
• government action to ensure that funds are available for investment in the real economy, helping develop green jobs and technologies and sustainable development;
• help provided for workers affected, for householders threatened by eviction, for pensioners threatened with poverty in old age, for entrepreneurs seeking investment capital. It is not fair that the main beneficiaries might be those who caused the mess;
• a European-level response to the slowdown that is unfolding in the real economy to prevent the financial turmoil intensifying further as well as to avoid a return to the ’beggar-my-neighbour’ approach of competitive wage moderation and reductions in social protection which harm workers and their families;
• urgent return of public policy attention to the major issues of income and wage inequalities. It is inequality and poor wage income for ordinary workers that are driving households into ever more debt through risky financial market techniques.
  
  

Our governments and the European Commission should have seen this coming. The wealth and income gains from the easy availability of credit were highly concentrated in the hands of a fortunate few. There was a doubling of the share of income going to the top one per cent of the population.

For the world and European trade union movement, the explosion is therefore an opportunity to build a better system. The gravity of our situation is matched only by the opportunity it presents.

In future any prosperity must be for the many, not for the few. In the short-term workers, pensioners and genuine entrepreneurs need help too - not just the banks.

And we must build a much stronger Social Europe with strong welfare states, good public services and workers rights and collective bargaining.

We have made some good progress recently on a new directive on temporary agency workers and with a deal with Europe’s employers to strengthen European Works Councils.

We will be on the streets of this city on December 16 to demonstrate our refusal to accept a weakening of the Working Time Directive. I hope to see many of you there.

We must seize the moment to build a fairer system, a fairer France and a fairer Europe.