Ahead of the Tripartite Social Summit, the ETUC calls upon European politicians, employers and central bankers to urgently learn the lessons from the deepest economic crisis in Western Europe, at least, since the 1930s. The collapse of the economy in 2009 is not to be shrugged of by calling it ‘just an incident’ but should be seen as the result of years of unbalanced economic policies. ‘Free markets’ have been systematically elevated above democracy and ‘government’, profits and dividends over wages, precarious contracts over good jobs and ‘cut throat’ competition over cooperation. And by replacing fair wages and good jobs by debt and asset price bubbles as drivers for demand and growth, our economies have marched straight into the financial recession.
Europe is not learning these lessons. Instead of rebalancing pro short-term business policies with more long-term competitive and indeed worker friendly policies, the Commission is now pushing for a policy of massive deflation. Economic governance, as currently proposed by the Commission, is about nothing else than cuts, cuts, cuts: Cutting wages, cutting jobs, cutting protection against easy firing, cutting social benefits, cutting public services. Workers are being presented with all of the huge costs of the crisis.
The ETUC warns against repeating the policy mistakes of the past. Making workers insecure and unprotected will make it all too easy to force workers into accepting wage cuts and worse working conditions. And while workers are suffering, CEOs and large shareholders will enjoy rising bonuses and dividends. In the end, the combination of wage and fiscal austerity together with rising inequalities will risk pushing the economy into a renewed recession, even a deflationary spiral.
For the ETUC, economic governance should not about turning Europe into a ‘punishment squad’. Economic governance, instead, is about Europe mobilizing the power of acting together. It is about coordinating a joint expansion of demand so that a multiple effect on growth and jobs can be achieved. It is about Europe teaming up to issue European growth bonds to help all member states to face the irrationality of global financial markets, and levying financial transaction taxes. It is about preventing member states from weakening each other by trying to get out of the crisis through social dumping, tax competition and unfair competition in the internal market.