Conference "Progressive re-start-from crisis to resolution"

Athens, 11/02/2012

To be checked against delivery

Friends,

Thank you for your kind words of introduction and for the opportunity given to me to talk to you today. I am bringing to you the fraternal greetings of the European trade union confederation. The European trade union movement is a friend of Greek people and of Greek workers. In times of considerable difficulty and fear for the future, fraternal greetings give some kind of comfort.

The European trade union confederation is proud to count GSEE and Adedy amongst its members and active supporters.

I have been asked to share with you our views about the challenges and policies of the trade union movement to get out of the crisis.

How to get out of the crisis; find our way back to growth and jobs is obviously the focus of our concern and of our task.

First let me underline that the ETUC is and has always been favorable to European integration. For us Europe is part of the solution rather than part of the problem.

Our different national economies are too small and too weak to offer the necessary perspective to our societies.

We are in an economically unbalanced world, only a few hours away from Athens people are fighting for their freedom, for their democratic rights. They also badly want and need economic and social progress.

Our neighbors around the Mediterranean sea as well as emerging powers around the globe look at Europe as both the old continent with whom they compete, but also as the place where progress was made to put in place a social model.

They want and deserve development, but they are also looking at our social model made of democracy at work, of labour rights, of social protection and public services.

The European Union, including the monetary union, is supposed to help us to combine social our social model with competitiveness in a globalised world.

But something went wrong in recent years, something went very wrong.

First in 2008 the Lehman Brothers bankruptcy brought about a collapse in the financial sector. It confirmed that casino capitalism had been playing with people real life. Instead of serving real economy it had built a world of its own, a financial bubble where only a selected number were winning.

Soon after started the sovereign crisis. It started with Greece. Your government had to admit that public accounts were in a bad situation and that these accounts had been manipulated, with, by the way, the help of Goldman Sachs.

So Goldman Sachs with one hand helped Greece with what they call "creative accounting" and on the other hand, started speculating over the Greek sovereign debt.

That is whir speculators are not ashamed to do. That is what we are loudly fighting against.

We started with the financial crisis and we landed with the sovereign debt crisis.

The sovereign debt crisis is what matters most to you currently, and it is what I am going to speak about, but let us not forget: the financial sector must be regulated, must be transparent, and must be put at the service of the real economy that is at the service of people and employment.

Let me now turn to the core of what matters to you and to us: that is how to overcome the extremely dangerous situation we are in now.

The European trade union confederation is of the strong opinion that austerity measures imposed on Greece and the Greek people -and also on other countries-are not helping to solve the sovereign debt problem, and to return to a sound economy.

The argument of our elected politician’s runs that austerity will restore confidence of the markets. This is what President Van Rompuy says when I meet him, this is what President Barroso says when I meet him but above all, and this is what chancellor Merkel and President Sarkozy seem to be convinced of.

But austerity has not and will not bring back the confidence of the markets.

Recently the IMF, the OECD, The ILO and even Standards and Poors said that growth was a necessary condition to restore a sustainable public accounts.

Some voices now, in the European Union say the same. The last informal council issued a declaration on growth and employment, insisting on the need to have growth together with measures taken to restore public accounts.

But this declaration has hardly any teeth and the means for its implementation are badly lacking.

What we need are sustainable investments.
We also need the ECB to take decisive action, like the Federal Reserve in the US is doing.
We need Eurobonds that is some form of partial pooling of the debt.
We need a financial transaction tax.
We need the immediate use of structural funds for sustainable investments.

Instead, what we get is the slashing of wages and pension levels, and job cuts.
Cutting jobs, wages and pension only results in making the recession worse and worse and destabilising the country.

This is what is happening now, at this very moment.

Our solutions are solutions of economic solidarity and of good sense.

What do I mean by economic solidarity?

Economic solidarity is acceptance that helping Greece is helping us, citizens and workers of the European Union. It is in our mutual interest to take the necessary measures to overcome this dramatic crisis.

This is not yet understood by many EU citizens, particularly in the stronger countries, who are continuously brainwashed, subject to a campaign pretending that austerity is the only solution.

We have to win a battle of communication, to convince people that austerity is not the solution.

But there is something more, and something unacceptable.
The focus of the Troika demands is not only on wage cuts and pension cuts.
They demand structural reforms of the labour market.

What does it mean?

Structural reforms - as understood by the Troïka - are not an encouragement to trade unions and employers to find the right solutions to adapt working conditions to new circumstances in the best interest of workers.

The structural reform proposed is not an encouragement for a tripartite negotiation to come up with a reasonable long term recovery plan.

Such encouragement to bipartite or tripartite deals towards recovery could help in bringing confidence in the future.

But the so called structural reforms prove to take various forms, often combined. They attack industrial relations mechanisms; they impinge on the autonomy of social partners to negotiate; sometimes they are even an attack on the very existence of trade unions.

This is particularly dramatic in Greece, from the information I receive from my trade union friends. This threatens core values and core rights as defended by the EU charter of fundamental rights and ILO conventions.

We consider that social dialogue, workers ‘participation, strong organised trade unions are essential for a well functioning economy.

We only have to look up North, where labour relations are shaping the level of wages and designing working conditions. In Germany, thanks to social concertation, industries were kept and developed during the last 15 year.
Dialogue and negotiations is not a recipe for failure, it is a recipe for success.

What is happening in Greece, and also in other countries, is an attempt -through so called labour market reforms- to weaken, if not destroy the existing mechanism of industrial relations.

To solve those problems I just touched upon, EU leaders have been working hard to cast in stone the austerity policy that does not work. They have done this through the fiscal compact to be finalised on first March.

This fiscal compact will put all EU countries in a straight jacket, leaving no margin of manoeuvre to relaunch economies if and when necessary. This is why the ETUC is opposed to it.

We see decisive action on austerity but no decisive action or policies conducive to sustainable growth and employment.

We are not against economic governance. We have always said that in a monetary zone economic governance was necessary.

But the type of economic governance proposed seems to be more an instrument to unravel our social model that to strengthen it.

Trade union in Europe knows that monetary convergence leads to economic convergence, and that this has an impact on labour and social conditions.

We want this convergence to be constructive, not destructive of our social model made of industrial relations, social protection and public services.

This is why the ETUC calls for a social compact for Europe. This was the conclusion of the recent trade union summit held in Copenhagen at the beginning of this week

This social compact would promote democracy at work, social dialogue and negotiations.

It would ask for an increase in minimum wages, where they exist to at least 50pc of the average wage, or 60pc of the median wage.
It would encourage sustainable investments which would not be included in the calculation of public deficit.
It would give the mission to the ECB to be at the service of employment, like the Federal Reserve is.
It would include a financial transaction tax. (Some progress has been made on that front).
It would support active labour market policies.
It would establish a minimum rate of taxation for trans-European companies, to stop tax competition, it would pave the way towards Eurobonds, and it would secure the autonomy of social partners and fundamental social rights, including the right to strike.
It would implement equal treatment between men and women, and between workers. It would prohibit wage dumping. All workers whatever their origin and employment contract should benefit from the same conditions and the same collective agreement if they work together.

The European trade union confederation will draft such a social compact, agree on it and promote it at all level.

Friends, the ETUC is resisting the current trend and proposing alternative solutions.
On 29th February we are organising a European day of action, to say enough with austerity and yes to growth.
We insist that alternatives exist to get us out of the economic mess we are in.
We will work with progressive forces in society.
We won’t give up.

Thank you for your attention.