• Labour Markets and Employment: Crisis in the European Union

  • By Francine Mestrum | 25 May 12
  • Report of a Seminar, organized by transform! Brussels Working Group, 25 April 2012

    Today’s situation shows many paradoxes. Whereas neoliberal “Washington Consensus” policies which were imposed on indebted third world countries thirty years ago have all failed, these same policies are now introduced in Western Europe. The “poverty reduction policies” which have accompanied them since the 1990s have equally failed and inequalities have been growing everywhere. This explains why many UN organizations are now promoting – once again – universal social protection and even transformative social protection. The ILO will probably adopt in June 2012 a recommendation on a “social protection floor” coupled to its campaign for universal social security coverage. Yet again, in the European Union, welfare states are being dismantled, as if there were nothing to learn from the negative experiences in the third world.

    These neoliberal policies, with their privatizations, deregulations and the destruction of labour law constantly create poverty, whereas a serious fight against poverty should start with a brake on processes of impoverishment, particularly with the best possible prevention against poverty which is social protection.

    Unemployment in the European Union today is over 10%, with peaks of almost 25% in Spain, more than 20% in Greece and 15% in Portugal. Youth unemployment is 21% in the European Union and rising, with peaks of almost 50% in Spain, 45% in Greece and 35% in Portugal. Even in the wealthy city of Brussels, it is around 45%.

    Young people also suffer from low wages and they make up a disproportionate number of the world’s working poor. Everywhere, they are the last in and the first out.

    Nevertheless, as was pointed out by Philippe Pochet (Director European Trade Union Institute), social discourses in the EU continue to focus on poverty and child poverty and totally ignore inequalities. Today, we have to look at OECD studies to find more data on inequalities. And the OECD even admits it has been making some mistakes in the past. The EU apparently does not hear these messages.

    ETUI just published a study on the dismantlement of labour law in the European Union. It reveals this has nothing to do with debt problems. It is a massive attack against collective rights and the institutions which were able in the past to promote more equality. Very probably, this is due to the “window of opportunity” governments are seeing and the social devaluation they are practicing in the framework of the EMU.

    Today, the political situation has become much more difficult because of the neoliberal Commission which can be accused of a kind of “autism”. In the past, large countries had two commissioners of which one was a social-democrat. This balance has gone and since most governments are now rightwing, the idea of European integration itself is more and more threatened.

    The European crisis has to be seen against the background of changing international relations and changing capitalist modes of production and accumulation, stresses Walter Baier (coordinator transform! europe). The productivist model of civilization is also in crisis. These are deep structural causes which, if not settled soon, will have very serious consequences in the near future.

    What is at stake is the welfare state itself as well as European integration. The social and economic changes neoliberals want can never be implemented with strong trade unions and with the existing social model. It is a well-planned project and is less irrational than it seems.

    Against that logic, which also leads to more nationalism, we have to put another logic. We need a broad alliance of leftwing forces, trade unions and social movements, people from the cultural sector, experts and political representatives. We have to invent another narrative, since we cannot go back to the past. But our positions should be very clear.

    Céline Moreau (Youth-FGTB) emphasises the specific problems of young people. The big problem is not the “skills mismatch” but the lack of a  sufficient number of good jobs. Moreover, employers in Belgium do not respect their obligation to organize trainings. It is very paradoxical that on the one hand old people are obliged to work longer, whereas young people do not get access to the labour market. Youth unemployment is a structural problem today; young people should have better possibilities than just apprenticeships; more jobs should be created.

    As for Greece, Panayota Maniou (European Parliament) points out how tragic the situation is. It is not a coincidence, of course, that Southern countries were attacked first, since their welfare states are weakest. Minimum wages have gone down by 22% and these for young people by 32%. Many people are now leaving the country which leads to a serious brain drain. The most urgent need is to make clear this requires a collective fight, for education, for health care, for jobs, for social rights.

    In the discussion, one of the main questions concerned the belief in possible alternatives and the question of whether it is a conscious strategy which is now being implemented. Many people have indeed accepted the dominant discourse of having to reduce budget spending in order to save the future of the welfare states. In Germany, there is a divergence of opinion amongst the elites on whether or not to save the Euro and European integration. But the point is that the neoliberal focus of policies today is not specific for the European Union and its institutions, but is shared by all governments. In other words, it is not the shifting of scales which is responsible, but ideology itself.