Ségol: Leaders have misevaluated austerity actions

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EU leaders have miscalculated the impact of austerity measures, says European Trade Unions chief Bernadette Ségol, who calls for radical actions to avert falling deeper into recession.

Bernadette Ségol is the secretary-general of the European Trade Unions Confederation (ETUC). She spoke to EURACTIV Editor-in-Chief Daniela Vincenti on the eve of the European summit.

EU leaders are meeting today in a context of growing unemployment. Are the policies put in place to lift Europe out the crisis working properly?

We believe these policies are not working. We are not seeing a decrease in unemployment. We are not seeing growth and despite the confidence that some political leaders seem to want to show, we are convinced that the policies carried out are not going to let us get out of this crisis. What we need is growth, and what we need is sustainable growth for employment.

When you say they are not working, can you point to one specific example?

Just simply look at figures. When the Commission was predicting that Greece would go back to growth this year, that was what was ECOFIN was predicting in 2010. Instead of having slight growth in 2012, we are having a recession of something between -5 and -6%. That is quite clearly the sign that things are not working.

Are you saying austerity measures have been too drastic?

The austerity measures have been too drastic. Leaders have misevaluated the impact they would have on a recession. And we are not the only one to say that.

The International Monetary Fund is now saying exactly what we have said for many years, that these measures, instead of helping to rebalance the public accounts and let growth lead to employment, have a multiplier effect which is extremely negative.

The IMF is not normally an organisation which is close to the trade unions, but we can see that even they now realise what’s happening.

Do you think we have really reached the bottom, or are we going to go further into recession?

I’m very cautious here. I don’t want to make predictions along those lines, but what I know is that we need to have immediate measures that would promote growth and employment.

These immediate measures go through actions from the European Central Bank and actions that would not be delayed by political tergiversation and we also need some big discussions on how investments could be promoted at European level to support jobs.

Whether things are going to be worse or not, I don’t know and I don’t think it is a good idea for me to go into this field.

EU leaders are going to make their first assessment about the EU’s compact for growth and jobs adopted in June. What is your first assessment? Has it been effective to revive the stalled economy?

First of all, we welcome the growth compact as being a sign that politically growth is on the agenda. But the growth compact is for us insufficient in so far as its composition is problematic.

It’s €10 billion from the European Investment Bank with a leverage effect which goes to €60 billion, but it’s only €10 billion of fresh money to increase the capital of the European Investment Bank.

It’s also using structural funds, but this would mean, convincing member states that they have to contribute to these structural funds [co-funding].

So for the time being, it’s really premature to say that this growth compact has worked. The risk is that if the compact worked is has worked better in countries that are better off than in the countries which are currently in difficulty, because of the contribution they have to provide in co-financing to obtain the structural fund

You are advocating for a social compact? Do you have the feeling you are talking to a wall?

Indeed, we have been advocating for a social compact. Honestly, I don’t have the feeling that we are talking to a wall. I think more and more people understand that if there’s low social provision, if Europe doesn’t care about the social capital that has been the one of Europe, then workers and citizens will go further and further away from the European project.

But we want these questions to be back in the centre of the discussions so that whatever discussion we will have in the future on possible new treaties or the evolution of the European Union, no decision could be taken without consideration on how such change will improve the well-being of people and make social progress a reality in Europe.

This is key for Europe. It is in the current treaty and we need to strongly stress this.

You say citizens understand, but is there a feeling that people in the policy area are listening?

Sometimes they are not, but more and more … they know what the social situation in their country is dramatic. I would think about the Greek, the Irish, the Portuguese, I mean a number of governments understand there are limits as to what they can do to their own people without challenging the support to the European Union itself.

In this understanding, the problem is in the actions that follow. We haven’t had the necessary actions.

When you say actions, what do you mean?

Actions for growth. If we don’t have actions for sustainable growth, we are going to keep having extremely high level of unemployment and we are going to create difficulties in the countries, in the south of Europe, a zone where workers’ rights, workers’ protection, social protection, public services will be dismantled or weakened considerably.

For other countries, this will mean competition not upwards but downwards. This feeling exists within the population, within the workers. In the end, people have voting rights, and I think any good politician will understand that this factor can not be ignored.

You are basically talking about solidarity-led actions. Has solidarity changed, is it still a European word?

Look, solidarity is a word which is very close to the trade unions and it has a meaning.

Currently the meaning of the word solidarity is that we should have economic solidarity between the countries, but we have to explain that this economic solidarity is not a one-way street.

We need to explain that helping Greece, helping Spain, helping Portugal now means also jobs for the future, for the Germans, for the Dutch, for the other countries.

Now this is a message that is difficult to explain, specifically because in the media, things appear very different in some countries.

But I want to insist that behind these policies, the ETUC is united. So the German unions are behind our policies, they do believe that it’s absolutely the wrong path to continue this austerity plan and that by creating a zone in the South of Europe where wages and working conditions and social protection are being considerably weakened, they are creating problems for themselves.

Is the crisis changing the social partners modus operandi?

I would say at a European level, we have differences, but we also have some common approach, particularly on the need for growth. On the means for growth, we have a difference. I don’t think the modus operandi at European level has changed too much.

What is worrying much more is the situation at national level where social partnership, negotiations and dialogue in some countries have been superseded by a diktat from the Troika.

You are talking about Greece here …

In Greece, but you can also speak about Spain and Portugal to a large extent.

If the dialogue whereby things can be discussed between social partners, but also with the government: if these platforms are dismantled, then there is a much bigger social risk at national level and we really insist that the Troika should not act in a unilateral way as they are doing, basically undermining or dismantling collective agreements.

But on the contrary, they should favour social dialogue at the national level to try and find possible solutions. Sometimes it’s already too late, I have to say.

Are you still optimistic for the future?

You will understand that it’s very difficult to use the word ‘optimistic’ for the future. I have a hope and I hope that the political leadership in Europe will understand where the interest of the people who have elected them lies and how society should be changed.

And that this includes dialogue, negotiations and actions to promote sustainable growth.

On a positive note, the ETUC has welcomed and congratulated the European Union for the Nobel Prize. We still believe that the achievement of the European integration, European cooperation along these 60 years is something that deserves not only respect but deserves to be promoted.

Often younger generations forget what it means to be in a split Europe and to be European. I think this is a welcomed reminder that what has been achieved is positive and that we should all work for the implementation of a better Europe for all.

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