From the TUC

Austerity fetishism in Europe hurts us all

14 Nov 2012, by in International

Lobby of EU Representation

TUC’s President Lesley Mercer, General Secretary Brendan Barber and Unite’s Steve Turner deliver a message to the European Commission

Today is the European Trade Union Confederation (ETUC) day of action against austerity across Europe, and as part of the protests, TUC leaders handed in a formal letter urging the European Commission to change course. You can see a snapshot of the problems austerity is causing Europe in the neat new infographic at Stronger Unions.

The TUC argument is partly that austerity isn’t working, and, as Unite’s Steve Turner told the acting head of the EU representation this morning, “you can’t cut your way out of a crisis”. It’s also hurting hardest the ordinary people who didn’t cause the crisis in the first place. But what’s the alternative? The ETUC has issued a ‘Social Compact’ for Europe to counter the ‘Fiscal Compact’ which requires EU member states to cut their deficits, and TUC President Lesley Mercer emphasised to the EU representation that the case made in the ‘Social Compact’ is as relevant and popular in the UK as it is anywhere in Europe. 

The European trade union movement is arguing that we need to grow our way out of the crisis. That could – as our German colleagues in the DGB have argued forcefully – mean a new Marshall Plan for southern Europe: a transfer of funds to the people of Greece and other countries to get them back on their feet, drag their economies out of the current death spiral, and avoid the social dislocation and violence that offer profoundly worrying echoes of Europe’s last depression.

It definitely means more effective use of EU instruments like the cohesion funds, so that countries being told to cut spending aren’t therefore denied the opportunity to use EU money already allocated to them simply because they can’t match the funds! And it requires the European Central Bank to be far more active in supporting the economies in the worst trouble.

It also means that we’ve got to get demand back up, not least through higher wages for ordinary people (in Germany, even the centre right Government is backing union wage demands!) Private sector companies are sitting on huge reserves of cash because they see no prospect of a decent return from investment because of the tightened state and individual budgets. Those piles of cash could be unlocked by state investment in infrastructure (simultaneously using the cash by borrowing, while also increasing business confidence that their own investments will pay off) and also by getting corporates to pay decent amounts of tax. The TUC delegation made the case not just for a Robin Hood Tax on financial transactions, but also for fair taxation more generally.

These are the sort of arguments that would have been dismissed out of hand just months ago, but – as with the firestorm over tax avoidance by Amazon, Google and Starbucks – even the right wing media are now taking them seriously.

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