Press release BoxID: 405489 (International Trade Union House (ITUH))
  • International Trade Union House (ITUH)
  • Boulevard du Roi Albert II, 5 (Bte 10)
  • 1210 Brussels
  • Contact person
  • Peter Scherrer
  • +32 (2) 227-1057

Ever greater austerity pushing us into social recession

(PresseBox) (Brussels, ) Finance Ministers have a responsibility to promote a sustainable growth and jobs agenda, not an ideological attack on workers and welfare states at the request of financial market hawks", stated EMF General Secretary Peter Scherrer on the eve of a key Finance Ministerial in Brussels.

Increasingly it is becoming clear that reducing public deficits and 'belt-tightening' has become the cornerstone of European economic decision-making. Although world leaders agreed in Pittsburgh (September 2009) to promote "a strong, balanced and sustained world recovery", the European Union is putting its economic recovery at risk. The EMF considers that better economic coordination to support the monetary union is essential. Indeed, for a monetary union to be successful, it needs to be completed by an economic union. However, the question is how the objectives of this coordination are defined.

For the EMF, the proposals on the table are of an unprecedented and extremely negative nature. They are a real threat to the long-lasting but fragile equilibrium between economic and social governance inside the European Union. The EMF also insists that the Eurozone crisis must not be abused by conservative forces to impose cuts in wages and social benefits and dismantle the European Social Model.

Fundamentally, the further weakening of workers' bargaining power and pay cuts are not the right way out of the crisis. Undermining income stability and shaking public (economic) confidence by making jobs more precarious will result in a new contraction in demand and economic growth. For some regions in Europe, this policy threatens a double-dip recession and significant social damage.

"ECFIN ministers must step back from these proposals, reject them and promote an agenda based on investment, job creation and social cohesion", insisted Peter Scherrer. "The path they are following threatens European integration and solidarity far more than the problems they are trying to solve".

International Trade Union House (ITUH)