Brussels, 18/02/2009

Recession is knocking at our door. European trade unions, who had forewarned of the risks inherent to financial capitalism, were thus ready to react from the outbreak of the crisis and are currently preparing a Europe-wide campaign, based on a series of demonstrations in major European cities next May.

{{Table of content }}

- Coordinated actions and leadership required
- ETUC longstanding criticism of financial capitalism: The dices are down
- Call for effective measures: London Declaration and a New Social Deal in Europe
- Open letters to the European Council
- ETUC Autumn 2008 economic report
- ETUC Resolutions
- Social impact of crisis
- ETUC press releases

{{Coordinated actions and leadership required }}

First a financial crisis, then a global economic one and, who knows – soon – a social and political one across European Member States, if no greater efforts are made by political leaders for a more coordinated approach to stop the surfacing depression in a number of countries. In view of the rapid decline in global trade and growth, policymakers have called for regular meetings with the aim of coordinating fiscal, economic and social measures to put the economy back on its feet – if only coordinated action would see the light as a result of these meetings to ensure cooperation and solidarity across the EU Member States.

In order to address social unrest, European trade unions demand proper leadership and appropriate action from European leaders – that is, effective measures to tackle pressing concerns, notably the rapidly increasing number of layoffs and social protection, and more long-term issues such as redefining policy and values towards social Europe. For this reason, the European Trade Union Confederation (ETUC) proposes that a social progress protocol be annexed to the European treaties.


Urgently wanted: European leadership to fight the new depression ETUC Declaration addressed to the European Summit of March 2009



Instead, measures are put in place by European governments, primarily focusing on the national level and thereby introducing further competition between the already deeply shaken EU Member States. With protectionism spreading across the EU, the call to set up EU taskforces, including the social partners, is as urgent as never before. If European leaders fail to reassert authority in policing the single market, the EU risks being pulled apart economically, politically and socially.

ETUC has repeatedly called for such partnerships in order to avoid a long lasting deep depression ravaging through Europe. As early as in the autumn of 2008, with a call for Saving capitalism from the speculators , ETUC General Secretary John Monks declared that: ‘The trade unions must unite with business and governments in a new social partnership to counter the financial markets’ self destructive orgy ’. Nonetheless, he also highlighted the harmful effect of international developments in modern capitalism on ‘those of us who still believe that partnership is the best way forward ’ – modern capitalism that is characterised by the whole thrust of aligning companies with the interests of shareholders or other owners, thereby forgetting those who are key to their productivity, the workers.

In October 2008, in an article in the Financial Times, John Monks called it the ‘1979 moment’ for casino capitalism as the dark economic reality of a failing financial services sector emerged: ‘Just as 1979 was a turning point for British trade unions when the accusations of over-mighty unions stuck in the public mind to devastating political effect, so will 2008 be seen as turning point for those in the banking system who have contributed to the present mess ’.

ETUC Declaration

At its meeting in Brussels on 17–18 March 2009, the ETUC Executive Committee adopted a declaration, entitled Urgently wanted: European leadership to fight the new depression . The declaration was addressed to the European Spring Summit of March 2009 and sent to all EU heads of state and governments ahead of the Spring Summit.
{{ETUC longstanding criticism of financial capitalism: The dices are down }}

New capitalism has long been a core subject of ETUC, and its General Secretary John Monks has repeatedly highlighted the implied risks of this form of financial capitalism – also known as ‘casino capitalism’.

•  At the Bevan Memorial Lecture on The challenge of the new capitalism on 14 November 2006, John Monks emphasised the ‘footloose and fancy free, without obligation ’ character of new capitalism. The Bevan speech sets out the trade unions’ views of the new capitalism – mainly focused on quick returns, resulting in redundancies and increasing inequalities – and possible responses – such as mobilising worker shareholder power; establishing instruments to foster productive investment, research and development and innovation – to avert the risks for economic stability, traditional industry and jobs, as well as for social Europe.

•  In the May–June 2007 issue of the bi-monthly magazine on European affairs, E!Sharp , John Monks looked at capitalism from Another angle , claiming that the new capitalism is shattering the social pact between workers and employers. In light of this new financial capitalism, he put forward the question with whom trade unions were to negotiate and enter partnerships today.

•  Europe, migration, globalisation and what about the workers? was the topic of a lecture at the London School of Economics in October 2007, where John Monks underlined the need for the European Union to ensure that it sets genuine regulation of the financial markets as a priority.

•  At Harvard University on 16 April 2008, the world situation had changed, revealing a newfound vulnerability of the financial services sector and thus pressing more than ever for a rethinking of modern society – Locusts versus labour: Handling the new capitalism .

•  Globalisation and social justice based on democratic control and fairness was ETUC’s call at the international symposium ‘New world, new capitalism’ in Paris on 8 January 2009. John Monks warned that, if coordinated action to promote recovery is not taken immediately, protectionism and social unrest will become inevitable. Social peace should not be taken for granted with lay-offs and unemployment rising in most European countries, while workers’ taxes bail out bankers who continue to take their huge share of bonuses.
The symposium was initiated by French President Nicolas Sarkozy and former UK-Prime Minister Tony Blair.
{{Call for effective measures: London Declaration and a New Social deal in Europe }}

London Declaration

As early as 27 September 2008, trade union leaders from all over Europe adopted a joint declaration on the crisis of casino capitalism in London. The London Declaration: A call for fairness and tough action provides a brief analysis of how the crisis came about, accusing the greed and recklessness in Wall Street, London and other major financial centres. This form of capitalism – a speculative capitalism – has patronised the many while it exploited them for the benefit of a few, following years of exalting privatisation, deregulation and unfettered markets.

The London Declaration called for effective measures to be taken to ensure that the economy continues to benefit from capital for investments, as well as to put an end to outrageous financial speculation. Nonetheless, the injection of public money into the economy is not to happen without conditions, it must be matched with public control, while the regulation of financial markets at the international and European levels must be increased.

Towards a New Social deal in Europe

The result before the crash was rapidly rising inequality, the growth of precarious jobs and pressure to cut the influence of welfare states, worker rights and collective bargaining. Now, growing unemployment, cuts in public expenditure and a collapse in demand in many countries must be added to that.

To ease this situation, the European Trade Union Confederation (ETUC) calls for a New Social Deal as a driver for social justice and more and better jobs - Towards a New Social Deal in Europe (1.9 Mb PDF) .

{{Open letters to the European Council and the Commission }}

At the occasion of the November and December 2008 European Council meetings, ETUC addressed two open letters to the then President of the European Council, Nicolas Sarkozy, and the European Commission President, José Manuel Barroso, as well as to the European heads of state and governments. In both letters, ETUC called for deep structural reform of the financial architecture, a European ratings agency, a new green deal, and decent wages and pensions to get Europe out of depression:

•  Open letter to Presidents Nicolas Sarkozy and José Manuel Barroso, 6 November 2008 ;

•  Open letter to the European Council, 9 December 2008 .
{{ETUC Autumn 2008 economic report }}

The ETUC Autumn 2008 report, entitled Do not let the economy down! (123Kb) , sketches out the economic landscape in Europe. It highlights the seriousness of the credit squeeze coming from the most recent turmoil in financial markets, as well as being the result of the actions and, in particular, the non-actions of economic policymakers over the past quarters. The report puts forward a number of lessons to be learned from the Japanese debt deflation process and a new policy mix to save the real economy.
{{ETUC Resolutions }}

Since the beginning of 2008, the ETUC Executive Committee has adopted three resolutions in relation to economic developments in Europe and the Commission budget.

•  Reforming the budget, changing Europe – ETUC’s answer to the public consultation in view of the 2008–2009 budget review, adopted on 5 March 2008.

•  Time to act together! , adopted on 25 June 2008, calls for efficient action to stabilise the economy and support growth to avoid a prolonged economic slump. Making demand management a matter of common concern is one such action, as well as a European Smart Growth Initiative. The resolution also outlines the reasons why monetary policy is not providing an adequate solution that would bring the economic downturn to a halt.

•  ETUC Resolution calling for strong European recovery programme , adopted on 5 December 2008, calls for a strong European recovery programme, focusing on saving jobs, defending wages, collective bargaining and pensions. In addition, the resolution emphasises the necessity of a visible public hand to steer the economy out of recession and organise solidarity across European societies. ETUC’s European recovery programme is based on the principle that a strong European dimension is indispensable to manage an economic turnaround.
{{Social impact of crisis }}


So far, the social impact of the economic crisis is reported in the form of jobs being slashed and wages being restrained across all European economies. It even looks now as if one ‘contribution’ of the downturn may be the idea of pay cuts becoming acceptable to enable companies to survive the tough times. According to the equity principle, however, earnings reductions should also include those putting the policy forward, notably company CEOs and shareholders.

Or, going even beyond these thoughts, as asked by John Monks in his Financial Times Blog from this year’s World Economic Forum in Davos: ‘Should I call – as I believe should be done – for criminal proceedings to be launched against those chief executives of failing banks who cashed in share options at the top of the boom, and for compensation to be paid to shareholders by others who failed abysmally but took handsome golden parachutes?

Job loss and company responses

In light of the massive job losses across European companies, the European Trade Union Institute investigated in a working paper what companies are doing in response to the crisis. Based on media articles, the paper – Plant-level responses to the economic crisis in Europe (955Kb PDF) – looks at how social policy actors in major sectors of the European economy respond to the current economic and financial crisis. It summarises the plant-level responses of social policy actors to the symptoms of the current recession between October 2008 and mid January 2009. Furthermore, the paper examines how organised labour and capital responded to the crisis in key sectors and countries and which type of collective bargaining and labour market policy tools were available to deal with its effects and thus safeguard employment.

To follow-up on job losses as reported in the press, see the European Restructuring Monitor (ERM) , which is located at the European Foundation for the Improvement of Living and Working Conditions.

Gender dimension of financial crisis

As the number of unemployed people keeps rising every day, media reports less on issues such as a fairer distribution of pay across the sexes, flexible working time arrangements to reconcile work and family life and protection of maternity and paternity rights. Instead, press articles focus on striking men in industry, manufacturing plants closing down and bankers losing their bonuses. The public face of this recession is not a woman’s face. It appears that the same hard-fought for employment rights that made it possible for women to combine work and family life – flexible working, more maternity rights and part-time work – are now the issues that make the position of women vulnerable in the labour market.

On 31 October 2008, European trade union women leaders met in Turin, Italy, at the founding conference of the Women’s Committee of the Pan-European Regional Council (PERC), representing 89 trade unions from 43 countries, organising over 30 million trade union women. In a statement , they called on world leaders not to forget the plight of women when formulating measures to tackle the world financial crisis, where many women will face insecurity and fear, and poverty – particularly against the background of spiralling food and fuel prices and access to public services.
{{ETUC press releases }}

Since the crisis has tightened its grip on the economy, ETUC has issued a significant number of press releases , which highlight the demands of the confederation and its affiliated members.