Structural Change in the EU Must Be Built on Social Dialogue, not Diktat
Date: 14-3-2003
Letter to the Financial Times from the General Secretary of ETUC, Emilio Gabaglio
I am pleased to say that the European Trade Union Confederation endorses Unice's call for the spring European Council to show the political will to achieve the goals of the Lisbon Strategy.
The summit must, however, start from a clear analysis of what the fundamental problems are: the ETUC understands concerns that parts of the strategy, most notably in relation to the environment, have been inadequately pursued, that other parts have been delayed for unacceptable reasons and that some parts once agreed have yet to be implemented. However, the European Commission's report "Choosing to Grow" reveals that the real failures at the heart of the European Union's performance have been macroeconomic - and that missed structural objectives have been more the consequence than the cause of macroeconomic failures. In particular, the overall policy mix has continued to be excessively focused on stability - at the expense of the real economy.
Thus, to achieve both our competitiveness and full employment objectives, the EU must get back on to the Lisbon 3 per cent annual growth path - and with a massive internal market, which will reach 450m people with enlargement, Europe can and must do this itself. It can no longer rely on others, such as the US, which has its own significant problems.
With inflation under control, the first step must be to make monetary policy also growth- and employment-friendly. Real interest rates are much too high for core-Europe and this is holding back the overall European economy. Indeed, deflation is now a greater threat than inflation. The European Central Bank should have reduced rates by at least 0.5 percentage points on March 6 and its failure to do so, coming on top of a history of "too little, too late", is seriously damaging its credibility, while reinforcing the case for reform in the context of the European convention.
Second, a co-ordinated budgetary stimulus is required. Together, the EU's member states have more room for manoeuvre than if they continue to act alone. The focus should be on investment, thereby strengthening both the demand and the supply sides of the economy, and particularly on the introduction of new environmentally friendly technologies, enhanced funding of research and development and the completion of the enlarged EU's trans-European infrastructure networks.
The stability and growth pact must not be used as an excuse for inaction. Indeed, it must be intelligently reformed in order to live up to its name and to promote, not obstruct, sustainable development. Member states should no longer be pressed into taking self-defeating, pro-cyclical actions; instead they should be encouraged to invest for the future through the incorporation into the pact of the "golden rule".
Third, with works closures and mass dismissals becoming a daily occurrence, the spring summit must ensure that the European employment strategy is strengthened. We need action, rather than yet another labour market study as demanded by certain governments. The emphasis must be on positive measures of human investment and not on sanctioning further those threatened or hit by unemployment and social exclusion. Particular attention should therefore be devoted to mainstreaming equal rights and opportunities for women and men, to education and lifelong learning, to individual assistance for the unemployed, to the needs of younger and older workers, to childcare and care for the elderly, to improving health and safety (where failures lead to a massive loss of economic potential) and to lifting obstacles to mobility, especially with regard to housing and pensions.
Over the years, the European trade unions have not run away from hard decisions. We have been closely involved in formulating and implementing the employment strategy. We did and do support the single market and we did and do support the single currency. And wage "moderation" has been the rule across Europe.
Yet every time there is a crisis, as now, there are those who seek to profit from it seeking to dismantle the European social model. This we will not allow. Structural change and modernisation are necessary but they must be built on social dialogue and negotiated agreement, not on employer or government diktat.