As the IMF accepts it trashed Greece by mistake – a staggering admission that yielded only half the media stories today that China’s impending wine trade war with Europe did – the European Commission has begun to realise its austerity fetishism has failed.
Speaking at an European Trade Union Confederation (ETUC) conference in Dublin yesterday, TUC General Secretary Frances O’Grady expanded on her argument about the UK implications in the Guardian earlier this week, and warned that, as austerity becomes less and less convincing, the right-wing dominated Commission has fallen back on the tired neoliberal dogma of ‘structural reform’, which is, of course, code for attacking workers’ rights.
Last Wednesday the European Commission issued country specific recommendations which will become legally-binding for Eurozone economies after the EU summit at the end of this month. France, Spain, Poland and Slovenia are to get an extra two years to reduce their budget deficits to below three per cent of gross domestic product. The Netherlands and Portugal are to each be given an extra year.
The move is clearly a response to worsening economic data and growing popular protest.
However, in return for extending the deadline and easing up on austerity, the Commission is demanding that individual countries introduce a number of labour ‘reforms’, including cutting the minimum wage in France, increasing retirement ages in the Czech Republic and holding wage increases below inflation in Italy.
Frances O’Grady told fellow European union leaders that:
“Europe’s leaders know that austerity isn’t working. They’ve trashed the economy, and the people of Europe have said enough is enough. So while Europe’s governments have been forced to slow down their public service cuts, they now plan to ratchet up cuts in wages, pensions and workplace rights in an attempt to keep wages down and appease David Cameron’s demands for a repatriation of powers to the UK.
“By instructing Eurozone countries to reduce workers’ rights, EU President Barroso risks firing the starting gun on a global race to the bottom. And if David Cameron gets away with breaking up Europe-wide employment standards, British workers will be the first to lose out.”
However, a lot of the union leaders gathered in Dublin recognised that unions have been better at identifying and describing the problem, rather than promoting solutions. So Frances added:
“Instead of cutting public services, slashing pay and pensions and weakening employment laws, the Commission should be listening to ordinary people and their unions. What Europe needs now is a European Recovery Programme – what the German unions call a new Marshall Plan- and a youth guarantee to help the millions of young people desperate for work across all the member states. The Commission should also be tackling the obscene levels of inequality in wealth and power that led to the economic crash in the first place.”
The ETUC’s Social Compact sets out many of these solutions, and there will be increasing pressure ahead of the EU summit at the end of the month.