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Act now to 'resocialise' Europe

As European workers take to the streets Bernadette Ségol spells out a programme of resistance to austerity.

Any participant in the mass demonstrations in Madrid and 80 other Spanish cities on 19th July could not but share the people's deep anger against the savage austerity measures imposed by the Government. I certainly did.

The same day, in Athens, Greek civil servants were holding yet another mass rally against privatisation, the selling off of public property, and mass dismissals pressed for by the 'Troika' – the EU, the European Central Bank (ECB), and the IMF. The European Trade Union Confederation (ETUC), of course, pledged its solidarity.

Strikes are planned in Italy. The TUC is to organise a mass demonstration in London under the banner of 'A Future That Works' on 20th October.

Hardly a day passes without our being asked for support from our affiliates around Europe, from the Baltic States to Portugal via Hungary, and the Czech Republic among others, where trade union rights and collective agreements are being unilaterally reviewed, diminished, and in many cases, revoked.

According to the European Statistical Office, 24.868 million men and women throughout the EU, of whom 17.561 million were in the euro area, were unemployed in May 2012. The worse casualties were in Spain and Greece, where nearly a quarter are unemployed, who also suffer the highest youth unemployment, both with over 52%. And the prospects are frightening. According to the latest International Labour Organisation (ILO) report, unemployment in the eurozone could reach almost 22 million over the next four years. A further 4.5 million jobs will be lost if the current policy course –described as 'exacerbated financial stress' - does not change. All eurozone countries will be affected, as well as the rest of Europe, and indeed the entire global economy.

All these millions of people are paying for a vicious circle of crises not of their making.

In the period since the 'big bang' when Ronald Reagan and Margaret Thatcher truly let rip world finance, the share of wealth has slid inexorably towards capital from labour. Poverty is increasing and 8% of Europe's active population now faces extreme poverty.

Gordon Gekko's 1987 'greed is good' aphorism is alive and kicking in real life. Recent research commissioned by the Tax Justice Network shows that a global super-rich elite has exploited gaps in cross-border tax rules to hide £13 trillion ($21tn) of wealth offshore – as much as the American and Japanese GDPs put together. Since the 2008 financial crisis we have seen a macabre dance of the seven veils as corruption in the financial institutions, particularly exposing the City, is revealed layer by layer.

Though they should shoulder a significant part of the blame, it would be too simple to point only to the bankers for Europe's ills. Since the inception of Economic and Monetary Union, the ETUC has always argued that growth and employment should be an intrinsic part of economic policy, to balance the monetary leg.

The received wisdom in Europe today is that austerity and budget discipline are the way out of the deep crisis we face. We are caught in the austerity trap. Budget cuts deepen the recession; the recession is worsening deficits; the deterioration in public finances is prompting governments, under pressure from the Troika, to strengthen austerity policies. The vicious circle is complete. Caught in this desperate spiral, the majority of governments are attacking social protection systems, wages, labour laws and even fundamental rights.

The result of nearly three years of austerity policies, deregulation and privatisation is now all too clear: rocketing unemployment, economic stagnation, rising inequality, the emergence of a new class of 'precarious' workers and ultimately, social despair. This is an explosive cocktail, but the ETUC is well placed to assess all of its attendant risks. Leaving aside the social issue, democracy itself is being jeopardised as right-wing nationalists gain ground across Europe. History teaches us that when democracy falters, fundamental rights crumble.

We have recently heard more official voices against austerity. In April the European Commission published an Employment Package. While the proposals 'Towards a jobs-rich recovery' rightly put the focus on the daunting challenge of tackling high and persistent unemployment across Europe we have major reservations about their ability to deliver.

The reality is that, while the need to foster growth and employment is paid lip service, concrete proposals commensurate with the disaster before us are missing. This contrasts starkly with to the sharp minutiae of the fiscal plans set down in the fiscal compact adopted by most EU governments last January. The Compact enshrined in an international treaty, setting budgetary discipline in stone backed by sanctions, does not respond to mounting problems of employment and job insecurity. The ETUC is for sound budgets, but the treaty only addresses these challenges in accounting terms, without any political vision.

Europe needs to radically change course. On 23th February last, ECB President Mario Draghi was reported in the Wall Street Journal as saying that the European social model 'had gone' - causing wide-ranging consternation. Presidents van Rompuy and Barroso lost no time in reassuring trade union leaders who raised the matter at the Tripartite Social Summit a few days later of their attachment to (at least their version) of the social model. “The European Social Model is not dead” tweeted the Council President.

We need real action, not just words. It needs to be remembered that the European social model including welfare states, decent public services and social dialogue, was in effect a social contract reached in Western Europe after the war to prevent a return to the disasters of the 1930s. European trade unions, including those in Britain, signed up to a European project that included a social dimension.

Some of that was delivered. Starting from the 1977 legislation that provided TUPE and collective redundancy regulation, we have a significant body of protections including for part-time workers, fixed-term contracts, holidays and rest time, employment of young people, information and consultation of employees, health and safety at work, equal treatment, pregnancy, maternity leave and parental leave, and protection against discrimination based on sex, race, religion, age, disability and sexual orientation.

These are the areas of EU legislation that will be first in the line of fire during the review of competences announced by the British Foreign Secretary in July. It would be naïve to think that 'repatriating' powers on these issues would leave the field open for equivalent national measures in a country where governments of any political complexion boast of being amongst the most 'flexible' in the OECD.

But it isn't only in the UK that our gains are under attack. Governments throughout Europe are telling us that we need to adjust to the new global environment shaped by China and other emerging economies. Decisions of the the European Court of Justice have brought into question fundamental rights that we had campaigned to inscribe in the Treaties. Employers are taking an increasingly aggressive stance, as evidenced by the attack launched against the right to strike in the ILO last June led by European employers – with the British representative to the fore.

How else can we respond to these attacks but at European level? Europe's social democracies are still the best model on offer for working people. Evidence of a reversion to national solutions is deeply troubling.

In June, European trade union leaders assembled in the ETUC Executive Committee unanimously backed a new Social Compact for Europe. Such a compact, to be discussed at all levels, must be based on three pillars of social democracy – in particular respect for collective bargaining, economic governance serving sustainable growth and quality employment, and economic and social justice, through redistribution policies, taxation and social protection.

Emerging successfully from the crisis does indeed mean strengthening economic governance, but not to impose internal devaluations or a vast European austerity programme. On the contrary, this new governance must be implemented in order to meet the challenges of sustainable prosperity. It must support cooperation and coordination of economic policies and investments that promote a low-carbon economy. It must be part of a clear political and institutional framework which reflects this common destiny, in particular through the creation of Eurobonds, a stronger role for the European Central Bank in managing the crisis, convergence and harmonisation of tax policies (corporate tax bases and rates of taxation), rapid implementation of the financial transaction tax, and a much more determined fight against tax havens.

It is time to change the narrative.