The EU Spring Summit – Message to the EU and Heads of Government from the ETUC

Please find below a message from the European Trade Union Confederation (ETUC) on the issues of the crisis and EU 2020 which was sent to Europe’s leaders in order to be taken into account in the preparations for, and the proceedings of the EU Spring Summit on 25-26 March 2010.

The Crisis

1. Social Europe is under pressure – pressure which will intensify if Governments rush into premature exit strategies with severe social consequences. Already youth unemployment, in particular, is at catastrophic levels in many countries.and as yet receives relatively little co-ordinated attention compared to that being demanded by the financial sector.

2. That sector, including some hedge funds, continues to speculate against some member states and the euro. This speculation should be met by united EU and Government action and by a strong desire to act together so that markets cannot divide and rule, and destroy the euro. This means greater common action on economic governance and a new focus on the urgent need for new sources of finance particularly financial transaction taxes, bonus taxes and on the issue of Eurobonds. Governments and the EU authorities share responsibility for the crisis with the financial services sector.

3. As a starting point, a plan should be agreed with Greece which does not involve workers paying the price for the country’s problems which include breaches of the rules of the euro, and the “cooking of the books” for the previous Greek Government by certain banks to hide the true picture of the Greek economy from the European authorities. As well as being assisted if necessary by the EU, Greece also should be motivated to improve its governance, to curb tax evasion and to develop a fair social pact with the social partners.

4. The European Social Model with its emphasis on social dialogue leading to
agreement is an important way to help Greece and other countries in difficulty:
Putting people, not markets, first is an important European principle; and, for
example, any reform of pension systems – an issue in several EU countries –
must be based on protecting pensions and social security, not on impositions by
Governments, panicking in the face of market pressures, and on social dialogue
and agreement.

5. With these points in mind, the ETUC’s main messages to the Spring Summit on the crisis are

(i.) “don’t panic, don’t exit” from the stimuli packages. Instead we need an
entry strategy and the EU must concentrate now on reducing unemployment, especially among the young with a new EU recovery plan amounting to 1% of EU GDP, and plans to develop new, green industrial policies

(ii.) develop European economic governance by agreeing a programme with Greece, including the Greek social partners, which is fair, protects workers and essential public services, and addresses the problems of tax evasion by the rich and privileged – and of unacceptable accounting and operations by some banks, especially Goldman Sachs, and the previous Greek Government. There should be a public enquiry on this last aspect.

(iii.) develop further European economic governance by introducing new means
of raising funds, especially a financial transaction tax, bonus taxes, and the
ability to issue Eurobonds.

2020

6. With regard to EU 2020, Europe must be careful to show that it can deal with the challenges of 2010 if its plans are to remain credible. While a long-term strategy can be useful in pointing the way forward, it is important that it addresses adequately the reasons for the current crisis – poor corporate governance, greedy financial institutions, tax systems which benefit short-term speculation, the need for new sources of public funds, lack of European economic competences, etc. At the moment 2020 does not pass this test.

7. On the text itself, the ETUC is looking for a commitment to equality to be a
guiding star to follow – equality of pay for equal work, fair, not flat, taxation,
gender equality, and equality of opportunity. These are all key challenges for
Europe to surmount over the next 10 years along with the environmental and
demographic challenges.

8. We also miss a sharply defined role for welfare states and public services. These have been the "heroes of the recession" so far, helping avoiding depression, and they must be a central pillar of the EU in future. They have been subject to privatisation and de-regulation but have still proved robust "automatic" stabilisers in the crisis. 2020 needs to maintain them and ensure consistency with the concept of a social market economy.

9. On labour market questions, 2020 needs a social vision for a Europe of fair
labour standards, narrowing / eliminating gaps between member states, the
promotion of collective bargaining, more security for workers, not using
flexicurity in precisely the same terms that flexibility was used (less job security,
easier hire and fire, ending national collective agreements etc), and a just
transition policy from the jobs of today to the greener jobs of tomorrow.
Investment in all working people, in their education and skills for the future, will
remain a major task in the next period.

10. Finally to emphasise the importance of developing the European Social Model, the EU should act now to introduce the Social Progress Protocol proposed by the ETUC which aims at a better balance between the single market and social rights.

Download Message to the EU and Heads of Government (PDF), please click here