"Austerity has aggravated the crisis," trade unions stressed ahead of the EU leaders Spring summit, traditionally dedicated to economic issues, which opens in Brussels today (20 March). Wages have fallen by up to 23% across the EU, poverty has surged, and workers are overtaxed, said trade union leaders, calling on citizens to vote for a “social Europe” on 25 May.
As European heads of state and government gather in Brussels today (20 March) to discuss Ukraine, growth and jobs remain on their agenda and European trade union leaders have seized the opportunity to request a change from austerity-led policies.
Bernadette Ségol, the secretary general of the European Trade Union Confederation (ETUC), presented new figures: 26 million unemployed people across the EU, ten million more than in 2008, and 7.5 million jobless youth who are not even in training or education.
Trade union leaders from across Europe assessed the situation in their home country. Unsurprisingly, Greece is at the bottom of the list, where, in the words of the Greek union’s president, Yannis Panagopoulos, “the Troika intervention brought the country on the verge of a humanitarian crisis” since “25% of the national wealth has been lost” since the Troika’s programme is being applied.
“This type of recession is unprecedented,” he said angrily. Although official figures show 29% of unemployed people in Greece, trade unions warn it is more than 31% while young people and women face even higher numbers. Out of those, 72% are long term unemployed. Added to the 5 million non-active persons in the country, the number is greater than the active population.
This grim picture is aggravated by the fact that an increasing number of workers live under the poverty line, as they are hit by the “only obsession of the Troika: the tax on revenue”.
“We have a new phenomenon in Europe where 20% of employed people live below the poverty line.
This “non-viable vicious circle of economic crises” has led to a “shrinking of the national economy and a loss of social contacts”, Panagoupoulos warned denouncing the latest optimistic estimates of the European Commission and the Greek government about the country’s first current account surplus:
“This so-called primary surplus is built on sand and if there is no real economy growth, Greece will never come out of the recession!”
Wages down in 18 EU countries
Austerity measures, Troika-led or not, have hit all European countries and the strongest blow was taken by real wages. According to ETUC figures, only ten countries out of 28 have not seen a decrease in real wages, and therefore citizens’ purchasing power. These figures stand only for wages adjusted with inflation but do not take into account increased direct taxes, they warned.
Belgium, France, Sweden, Poland are among the few “lucky ones” where wages did not fall, and sometimes even increased, while Greece, Cyprus, Hungary, Romania and 14 other countries have seen their salaries fall by up to 23% in the worst case.
But unions also denounce the “huge tax burden” on workers.
Belgian trade union leader Anne Demelenne called for more equality in the redistribution of wealth.
“I want an explanation as to why in the EU the tax on companies is constantly decreasing. There has been an 8.4% decrease even though states’ budgets are trapped. Companies keep making profits that they redistribute fairly to their shareholders but do not remunerate their workers correctly,” she said.
“Working revenues are taxed but capital revenues are not, leading to tax evasion.” Lifting bank secrecy is another must for the workers, Demelenne added.
The answer for trade unions lies in a fiscal and social harmonisation at EU level.
“We need to harmonise fiscality in the European Union in order to avoid fiscal competition between the states,”she added, calling for a tax on financial transactions at EU level.
For trade-unionists, the shift from austerity to investments in the real economy is badly needed in order to boost growth and “meet the global market challenges”, the president of the German union DGB, Reiner Hoffman said.
“We need to invest in transport infrastructures, broadband networks, private and public services, in the welfare state and in social policies,” he said, “in order to remain competitive.”
“Moving from the speculative to the real economy and harmonising tax policies” in the EU are necessary conditions for a “functional economic and monetary union.”
Voting for “a social Europe”
Trade unions are not rooting for a particular political group at the next EU elections but they have put together a campaign video calling voters to give to “vote for a social Europe” that will invest in jobs and growth but also guarantee a decent pay, education, green growth, non-discrimination, gender quality and public services.
Latest European polls show increasing support from voters for socialist parties across the continent, which should also guarantee the position of Commission president to the European centre-left after the elections.
Four years after the European debt crisis started, the European Parliament has opened an investigation into the role of the Troika – made up of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) – in its management of the crisis.
The Parliament probe aims to shed light over the Troika’s handling of the crisis, with a view to strengthening its democratic legitimacy and the involvement of the European Parliament in its work.
- 20-21 March: European Council to discuss growth and jobs
- 4 April: European demonstration organised by the European Trade Unions in Brussels
- 22-25 May: EU elections in all 28 member states
European Trade Union Confederation: Falling wages casts doubt on recovery warn trade unions