Today the European Parliament adopted a package of six legislative measures which will serve as a framework for budgetary decisions in each of the Eurozone member states.
For the ETUC, this package is flawed. If, during the 2009 recession, governments had been forced to follow the public finance criteria the economic governance package is now seeking to impose, European economies would have been pushed into full blown depression. Increases in precarious work and downwards pressure on wages contributed to generating the imbalances currently distorting the single currency. Such policies if generalised, would trap Eurozone economies into deflation.
This economic governance package is fighting the symptoms and not the real roots of the crisis. It was financial deregulation and speculation that triggered huge debt and asset booms, not “irresponsibly high” public spending or wage bargaining.
The ETUC welcomes the clear statement included in the regulation on excessive imbalances, according to which national systems of wage bargaining need to be fully respected: “The application of this Regulation shall fully respect Article 152 TFEU and the recommendations issued under this Regulation shall respect national practices and institutions for wage formation. It shall take into account Article 28 of the Charter of Fundamental Rights of the European Union, and accordingly shall not affect the right to negotiate, conclude and enforce collective agreements and to take collective action in accordance with national law and practices” (Source: article 1 of the regulation on the prevention and correction of excessive imbalances).
The ETUC will use this safeguard in a systematic way against any attempt to interfere in national wage formation systems, to promote decentralised and uncoordinated bargaining.
The ETUC stands for a governance of recovery and fairness:
- A common Eurobond together with a European Bank for Sovereign Debt acting as lender of last resort for countries in sovereign debt difficulty, so as to end the power of financial markets to dictate policy and push vulnerable members into depression;
- A European investment plan to help relaunch and rebalance the European economy and transform it into a sustainable economy;
- A Europe-wide crackdown on precarious work contracts and low wages, enforcing the principle of ‘equal pay for equal work’;
- A European tax policy package, including a financial transaction tax as well as a common tax base for corporate profits with a minimum tax rate. This would contribute to consolidating public finances and preserving our social model;
- An end of tax havens and tax evasion;
- Fair taxation systems.
Says Bernadette Ségol, ETUC General Secretary: “This economic governance package risks turning the European economy towards depression and intolerable inequalities. The ETUC expresses its gratitude to those MEPs and governments who stood with us and helped us to secure a clause to defend our collective bargaining systems from attempts to intervene and undermine wage formation institutions”.