EU austerity: a spectacular failure for workers and democracy

The European Trade Union Confederation (ETUC) gave evidence in the European Parliament this week about the effect of the Troika (the European Commission, IMF and European Central Bank) on the people and the economies of Cyprus, Greece, Ireland, Portugal and Spain.

The ETUC’s 15-page report, with hugely revealing graphs, demonstrates that the Troika’s austerity measures have caused huge damage to the societies of those countries – including support for democracy itself – and have failed even in their own terms to reduce public debt and government deficits.

Demanding an end to EU austerity measures, the ETUC report details a trail of wreckage across the ‘programme countries’ in higher unemployment, lower wages and shredded social security safety nets. In particular, collective bargaining arrangements and other democratic wage setting mechanisms like minimum wages and automatic cost of living adjustments have been ripped apart.

Even measures to deal with the crisis drawn up jointly by employers and unions were thrown away by the Troika, whose actions have undermined the very foundations of democracy across southern Europe, as this frightening chart shows:

It’s no wonder that parties like Golden Dawn have risen in Greece.

The ETUC report shows that, while Ireland has suffered least from the Troika’s medicine, even there it has had the effect of slowing the recovery and holding wages down. In Greece, the minimum wage has been cut by a fifth, and the youth rate by a third, on top of the dismantling of collective bargaining for those further up the wage ladder.

Defenders of the Troika and austerity – including the British Government – claim that removing trade union involvement in setting wages is necessary to help the ‘outsiders’ in Southern European economy, in particular the young unemployed. And there, at least, there are macabre signs of growth: growth in unemployment numbers, that is, up between 2007 and 2012 from 10% to 28% in Cyprus, 23% to 55% in Greece, 9% to 30% in Ireland,, and 17% to 38% in Portugal – another example of the Troika’s policies not even working in their own terms.

What Europe needs is not more austerity, but, as the ETUC report argues, recovery plans for the countries the Troika has devastated (an apology wouldn’t go amiss either) and a New Path for Europe, with jobs-led sustainable growth and a pay rise for Europe’s workers.

Owen Tudor – 2/2/2014

source/reblog@:http://touchstoneblog.org.uk/2014/02/eu-austerity-a-spectacular-failure-for-workers-and-democracy