Some European leaders are ‘in denial’ about the extent that EU rules are driving austerity measures in member states, trade unions are warning as research reveals the brutal budget cuts hammering workers across the continent.
At a recent high-level EU meeting, trade union representatives highlighted how austerity driven by the EU’s fiscal rules threatens to choke Europe’s economic recovery just as it is beginning. EU representatives said that it was wrong to say that austerity policies are currently being pursued.
However, the ETUC’s ‘Austerity Watch’ programme, which collects information from national trade unions on economic, social and environmental policies, shows substantial cuts are being made across Europe, including:
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Austria: A four-year fiscal consolidation amounting to 2.5% of GDP by 2029, 70% of which is based on spending cuts including cuts in family benefits and the abolition of educational leave. Source: Submission by the ÖGB;
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Czechia: The government is cutting public spending for the running of central government bodies, social services and healthcare. Source: Submission by CMKOS;
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Germany: Reductions in basic income support, cuts to support for industrial decarbonisation; and 8% staff reduction in four years in the public sector. Source: Submission by DGB;
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Italy: The 2025 Budget Law enforces stricter deficit targets with cuts to health, local authority budgets, and a public administration hiring freeze. It also reduces pension spending. Source: Submission by UIL;
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Finland: In spring 2025, the government cut corporate and income taxes by €2 billion (0.8% of GDP) and offset the deficit by cutting funding for public services. Source: Submission by SAK.
Even stronger austerity measures lie ahead if the current policy continues. According to national medium-term structural fiscal plans, one-third of Member States — representing around half of euro-area GDP — face fiscal cuts of between 3 and 7 percent of GDP.
The ETUC is calling for a real reform of the EU’s fiscal rules, and for the establishment of a permanent investment mechanism similar to the Recovery and Resilience Facility to be established.
Commenting on the findings, ETUC General Secretary Esther Lynch said:
“EU policymakers cannot ignore the effects of their own decisions. The evidence from across Europe shows very clearly that austerity is back and once again the impact is falling disproportionately on working people.
“Under pressure from the EU’s budget rules, national governments are slashing jobs, weakening social protection, and reducing investment in public services and infrastructure.
“The measures being taken are totally counterproductive. Support for training is being cut at a time when employers face a growing skills shortage. Jobs and social protection are being slashed at a time when we need to put more money in the pockets of people who spend it.
“If European leaders don’t want to be accused of overseeing a new wave of austerity, they need to change course and support policies which raise the living standards of working people.”
