John Monks, ETUC General Secretary
John Monks the ETUC General Secretary in outlining the ETUC’s opposition the EU so-called ‘Competitiveness Pact’ has warned that attacking collective bargaining will not help re-balance and re-launch the EU economy. “The rules of the single currency have been seriously threatened not least by a decade-long strategy of stagnant wage development and more precarious work. To rebalance the Euro area, this strategy should now be reworked by introducing minimum wage floors, by respecting the principle of ‘equal pay for equal work, and tackling the problems caused by collapsing financial markets by new initiatives in those markets, not labour markets ”, he said.
“Attacking collective bargaining is a dead end for Europe. It is an illusion to think that the single currency can be saved by repeating the same type of policies that contributed to the Euro Area being in this mess in the first place. The ‘Competitiveness Pact’ that is proposed will increase inequalities and unbalance the Euro Area even more.”
The ETUC has warned that the Euro Area heads of state are heading in the wrong direction when discussing a ‘Wage Competitiveness Pact’ at their informal summit.
Instead, the European Trade Union Confederation is urging that there is a fundamental change of course and instead develop a ‘Pact for Fairness and More Equality’.
The ‘Competitiveness Pact’ is about exporting the model of zero wage increases which the Euro Area’s core has been following over the last decade, this time to the entire Eurozone. The Pact, with its strict unit labour cost comparison, will force member states to enter into a competitive downward spiral of undercutting each others’ wages and working conditions. This risks pushing the economy further towards deflation and depression. Meanwhile, profits, bonuses and dividends are soaring including among many of those whose actions were at the origin of the crisis.
The ETUC is calling for: Mobilising new sources of finance by introducing a financial transaction tax as called for by the European Parliament, tackling tax havens and tax competition in the internal market.
Eurobonds to signal to financial markets that Europe is determined to see crises through together.
A major investment programme amounting to 1% of European GDP to tackle unemployment, especially youth unemployment, to upgrade industrial structures and infrastructure and to provide countries in distress with the possibility of reviving their economies so that they can grow out of debt.
Squeezing the low pay sector out of the economy by setting minimum wage floors under which wages cannot fall, while at the same time promoting institutions to extend the coverage of collective bargaining.
Regulating financial markets effectively.
ETUC Resolution: http://www.etuc.org/a/8448
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In response to the ETUC article – ‘Attacking Collective bargaining is a dead end’
Clearly there is an urgent need for social dialogue about competitiveness in the European Union. Whether a solution can be found to counter the looming economic power shift, from West to East, and the subsequent structural problem, is another matter.
With urbanisation increasing by 10% each year in China’s 1.4Bn population, urban population will become 50% of China’s total population by 2030. The gap in disposable income between China’s rural & urban populations is more than 300%. So, china will add about 21Mn affluent new consumers to its urban population which, in the next 15 years, will be about 700Mn strong – more than the total population of Europe & the USA combined (with 700Mn more consumers with about a third of the urbanite’s spending power).
Considering the wholesale migration of jobs that will ensue, is the social agenda in the EU relevant and what implication does this have for employee relations and collective bargaining in general? This tide can not be stopped.The consequence of developing social measures that are anti-competitive will only accelerate the rate of change, and rapid change is not something that the European Union does well.