Pay tensions mount as economy edges towards crisis 

In an update of its World Economic Outloook published on 29 January, the International Monetary Fund stated that "the financial market strains originating in the US sub-prime sector - and associated losses on bank balance sheets - have intensified, while the recent steep sell-off in global equity markets was symptomatic of rising uncertainty." The IMF added that "growth has [...] slowed in western Europe, and confidence indicators have generally deteriorated". The IMF lowered its growth projection for the euro area to 1.3%, down from 2.3% in 2007 and only half the average annual growth rate over the last ten years.  

In its "Global Employment Trends 2008 ", issued on 22 January, the International Labour Organisation warned that, in the EU and other developed economies, "the impact of such a small decrease in growth is immediately reflected in labour markets," adding that "labour market indicators for the region [...] showed signs of some stagnation between 2006 and 2007," with the increase in employment "the smallest in five years". 

In a June 2007 Policy Brief , the OECD warned that inequality of earnings had widened across the EU. 

The European Trade Union Confederation (ETUC) called for a revision of the EU's broad 'Economic Policy Guidelines ' in order to allow more significant wage increases: "Despite evidence in many areas that real wages are falling and inequalities growing, the EU's economic policy guidelines continue to urge wage restraint across the board," ETUC complained. It went on to urge the EU to recognise that "excessive wage moderation is unfair and unjustified, except for top earners (for which it is long overdue)". 

ETUC General Secretary John Monks said: "ETUC is deeply concerned about the threat of growing social inequalities in Europe: between rich and poor and men and women, and between workers with secure employment compared to those with precarious work and poverty wages. Vulnerable workers must not be made the victims of current global conditions. Europe risks being perceived as a one-way street where the share of wages is always going down. We cannot allow that to happen." 

ETUC also claimed that, according to the social partners' recent joint analysis of the labour market , too many of the ten million jobs created throughout the EU within the last ten years "entail poor quality or casual work, with little if any training provision." Moreover, it criticised the fact that "temporary contracts and involuntary part-time work [are] on the increase".  

The Social Platform, which brings together social NGOs from all over Europe, supported ETUC, calling "on ministers and the EU to guarantee an adequate minimum income to all people across Europe and to ensure an individual right to social protection and a pension disconnected from employment records". 

In a speech  held in Copenhagen on 31 January, BusinessEurope Secretary General Philippe de Buck called "persistent wage moderation" in the EU over the last few years a "sign of structural improvement", according the the transcription. He went on to say that, under the triple pressures of the US sub-prime crisis, a surging euro and soaring commodity prices, "the risk for companies is compounded by trade unions' excessive wage demands".