European crisis: medicine worse than the cure, says ETUC
The European Trade Union Confederation (ETUC) Executive met last week and urged European governments to change course over their response to the current crisis. Central to the ETUC message is the analysis that the medicine is worse than the cure and the deterioration of the economic situation in countries like Greece and Portugal shows the total failure of the shock treatment. The ETUC recognised the gravity of the situation and the crucial nature of the European Summits taking place ahead of the G20 in Cannes. But the ETUC is concerned that European citizens and workers are ‘reaching the end of their tether’.
Bernadette Ségol, ETUC General Secretary, stated:
“The financial sector is at the origin of the crisis. Citizens are paying for it. They are the ones creating growth and paying taxes. They are the ones rescuing the euro and the banks. Instead of recognising the value of their efforts, their rights are under attack. Workers expect European leaders and institutions to act for more democracy to support and not undermine social Europe, trade union and labour rights, including collective bargaining.
“The European Council must find solutions that first and foremost serve the people and jobs, not the wealthy and the banks. I find it scandalous that banks are again threatening to stop lending to the real economy, in particular to small and medium sized enterprises, when faced with demands for higher contingency capital. It is true that banks, especially the big ones, must reduce their balance sheets. But deleveraging should be done in a way that is beneficial for jobs and growth, not for speculators. The Council and the European Supervisory Authorities must intervene in the banking business and make sure that asset reduction targets the speculative part not the loans in their portfolios.”
The ETUC is open to forms of economic solidarity, like the European Financial Stability Facility (EFSF) issuing bonds or guaranteeing loans. But another round of bank bail-outs at the expense of public budgets, and ultimately private households, could lead to public outrage against Europe, Ms Ségol warned.