This is arguably the most critical time for Europe since the end of the war. Despite some improvement, the euro remains on life support. The sovereign debt crisis continues to cripple many of Europe’s economies. Across the continent, governments are imposing austerity measures that are killing growth, destroying living standards, and undermining the social provisions that have long been a defining part of the European project.
With a new Treaty in prospect, Europe is headed down a very dangerous path. The treaty’s collective suicide pact of tight fiscal straightjackets, labour market deregulation, and diminished welfare states could put at risk the social model that is one of Europe’s crowning achievements.
More than ever, we need an EU run in the interests of its citizens and workers, not the bankers and bond market vigilantes.
Europe needs to retain and enhance its social protections – not just to deliver the higher living standards crucial to recovery; nor just to rebuild its economy around wages rather than debt; but also to safeguard the legitimacy of the whole European project itself.
If ordinary Europeans feel that the EU is about little more than open markets, tight controls on public spending and privatisation, then support for the European ideal will collapse. A Europe without a strong social dimension is doomed to fail.
The EU has begun to drift away from one of its founding principles: solidarity.
Back in 2005, despite some misgivings, the European trade union movement was broadly supportive of the Lisbon Treaty – focused on the need to make Europe more competitive, but within the context of strong social protections.
Fast forward to 2012 and the proposed EU Treaty – which is unanimously opposed by the national member organisations of the European TUC.
Not only does it effectively outlaw any kind of Keynesian economic stimulus, not only does it undermine long-term prospects for jobs and growth, but it is also profoundly undemocratic. It is an attempt to impose European-wide austerity measures to which no national electorates have given their consent.
What has happened in Greece and Italy could now happen across the continent.
A key part of this fiscal fundamentalism is an attack on workers’ rights: challenging established industrial relations practices and seeking to slash unit-wage costs.
Of course, our leaders are talking about the need to reduce unit-wage costs on the shopfloor, not in the boardroom.
Is it any wonder that the EU has managed to lose the trust of the trade union movement and the 60 million workers we represent when it is pursuing this kind of deflationary, deregulatory agenda?
Given the scale of the economic challenges we face, there are sadly no easy answers. But it’s the TUC’s firm belief that we need to reinvent the European social model for a new age. Showing that far from being part of it the problem, it is in fact an integral part of the solution when it comes to economic renewal.
First, we need to level the playing field for all European workers to ensure that there is no undercutting, that people are paid the rate for the job in the country in which they work, and that we keep rules up to date to stop workers falling through legal loopholes. As the pamphlet published today by the TUC and the Foreign Policy Centre argues, if you have a single market, then you need a single set of labour rules, laying down minimum standards such as the UK’s national minimum wage.
Second, we need to ensure that social protection is at the heart of EU policy. EU Treaties need to include a social protocol to guarantee respect for welfare and labour rights.
And third, we need to change the collective mindset on how we get out of the current crisis. Rather than the self-defeating, job slashing, growth destroying madness of austerity, we need to think about solutions for the long term.
One of the most important of these could be a strategy to raise the wages of ordinary workers. Rather than the debt-fuelled growth of the recent past (a direct consequence of the diminishing share of GDP ending up in people’s pay packets) we need stable, sustainable growth based on workers having money in their pockets to spend.
It seems obvious, but few people are saying it in the corridors of power: when workers do well (as during the long Keynesian ascendency in the generation after 1945) business does well, the economy does well, and Europe does well.
Europe has historically balanced the interests of free trade and open markets with those of workers and their unions. It’s a bargain that has served our continent well for decades. But it’s one that we abandon at our peril.