The Financial and Economic Crisis: Consequences for the public sector and economy at large, an EPSU response

EPSU Discussion Document, Executive Committee position April 2009

Executive Summary of the Discussion Document

- All European countries are hit hard by the economic crisis. Workers are paying a heavy price for the mess created by neo-liberal ideologues, corporations, bankers and others who resisted regulating financial markets and they advocated privatisation as well as liberalization of public services. The dismantling of public services has contributed to the current crisis by removing an element that stabilizes the economy in times of crisis.
- The economic crisis is global. It requires a coordinated response of EU and other European countries in cooperation with other global players and international institutions. Coordination is needed to have a global stimulus, reform and build new financial institutions to regulate the financial markets, address climate change also in times of economic and financial crisis, strengthen wage bargaining and prevent deflation and ensure a crisis of this magnitude does not happen again
- Public sector workers are already paying a heavy price with austerity measures being introduced in a range of countries and considered in others. We reject this public finance restrictive consolidation. Such measures are pro-cyclical as they contribute to a decrease in demand.
- The answer to the economic crisis lies in increased investment in public infrastructure and public services, in green jobs, in active labour market policies and in innovation, research & development and people.
- A new economic policy is needed for the Euro-zone based on a different role of the European Central Bank, a revision of the Stability and Growth Pact and an EU policy institution capable of coordinating economic policy.
- Europe’s citizens are asked to shoulder the pain of the financial and economic crisis and will be paying off state debts for years to come. Many bankers and Chief Executive Officers (CEOs) escaped taxation and still go unscathed, The rich and corporations will have to contribute and share the pain. EPSU wants a substantial social agenda with a reinforced role for the trade unions at work place, sectoral, national and European levels. Wage increases are needed to counter deflation and to stimulate demand.
- The crisis underlines the importance for the public service trade unions to increase cooperation including on economic issues.

The EPSU Executive Committee asks affiliated unions:

- To use this document in policy discussions with their confederations and public authorities and thus to shape the future course of Europe together;
- To inform the EPSU secretariat of attacks on collective bargaining, trade union rights and social dialogue, where governments and employers seek to impose unilateral measures as a consequence of the crisis.

The EPSU Executive Committee decides:

- To monitor the economic crisis and its impact on public service workers. EPSU does not support that government measures unilaterally single out public service workers, many of whom are in the low or middle income bracket, while the rich, the bankers and others escape painful measures. The crisis underlines the importance of public services; EPSU will seek to prevent that the economic crisis is used to diminish the role of government and public services. Addressing tax havens and tax fraud, ensuring fair and progressive taxation are key elements for economic, social and environmental progress. Such measures contribute to the long-term sustainability of public finance. As the crisis is worldwide, EPSU will work closely with PSI, the global union federation for public service workers, to defend public service workers, promote quality public services and participate in reforming and shaping the global financial institutions. The role of the International Monetary Fund and the harsh conditions it imposes on public service workers, often without consultation and negotiations, need particular attention. This is now important as the G-20 will reinforce its role and finance. The EU and the European Banks (ECB, EIB, EBRD) should be capable of supporting economies in trouble, linking assistance to the requirement of a Social and Green deal and the EU Social model rather than to the austerity policies of the IMF.
- To report on collective bargaining developments comparing public and private sector pay developments, working time, and measures taken on training, skills and qualifications
- To regularly address the specific contribution EPSU can make to addressing the economic crisis and ensuring that the interests of public service workers are taken into account. Trade unions need to have a voice when considering economic measures at national and European levels. EPSU should seek a place in the ETUC delegation in the macro-economic policy dialogue with the ECB, European Commission and EU Presidency. If Congress Resolution R2: Collective Bargaining and Social Dialogue is adopted, the proposed network of EPSU affiliates’ experts involved in economic policy can assist EPSU in influencing European Union economic and public finance policy.
- That the economic crisis, the reaction and involvement of the European institutions (such as the European Commission, the ECB, the Council of Ministers, Euro-zone Ministers and European Parliament) and Member States especially in the Euro-zone, requires strong coordination of the European institutions, possibly with a strengthening of fiscal and employment coordination functions and governance. As EPSU should be in a position to play a role in defending the interests of public service workers, the EPSU Secretariat should prepare proposals on this for discussion and approval, which can be taken into account in the 2010 and longer term planning of priorities.
- To support the shift towards environmentally and socially sustainable development. The economic crisis allows for choices to be made regarding public investment. EPSU should contribute towards the development of proposals for this transition by exploring the contents of a Green Deal, green budgets, a more green and social Gross Domestic Product (GDP) and the development of Just Transition Employment Principles. Such proposals will necessarily include reflection on global redistribution of wealth and growth.

EPSU calls on affiliated unions to mobilise against employers and governments that use the crisis to cut employment, reduce wages and break collective agreements.

EPSU call on the affiliated unions to participate massively in the ETUC demonstrations on 14-15-16 May 2009.

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