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North/South divide deepens in Europe as unions reiterate demands to ease austerity

A RECENTLY PUBLISHED REPORT FROM THE European Foundation for the Improvemeent of Living and Working Conditions (Eurofound) has underlined the divergent experiences of EU Member States as they strive to recover from the recent financial crash. The European Restructuring Monitor Quarterly draws attention to a ‘German – central Europe – Baltic axis’ ‘enjoying strong growth’ and ‘near full employment in the Netherlands, Luxembourg and Austria’ and compares them to the stagnation in ‘the debt-laden “periphery”’. The economy was still shrinking in Ireland, Greece, Portugal and the United Kingdom at the end of last year while Spain and Italy recorded minimal rises. Germany’s strong growth (4.4%) during 2010 was reflected in the countries to the east with Poland, Estonia and Lithuania all having economies expanding at over 4% per annum while Finland and Sweden were both booming at over 5%. Unemployment was falling rapidly in Germany and Sweden as Ireland registered the highest increase.With the mainly northern Member States doing well attention turns once again to how to deal with the southern laggards. The European Trade Union Confederation (ETUC) has already objected to European Commission ‘interference in labour markets’ with the aim of imposing public sector cuts and wage reductions (see our last issue).  They believe that, rather than balancing the books, such measures will destroy growth which is the only way to improve the national budgets of countries such as Greece and Ireland.  They have already noted some softening of the Commission policy of ‘economic governance’ by the European Parliament (EP) in a vote of their Economics Committee but want to impress on the Council of Ministers the necessity of changing course. Before the Council meeting in late June they sent a set of demands to finance ministers including: full respect for the autonomy of collective bargaining, protecting and increasing purchasing power, a Financial Transaction Tax (FTT), discouragement of financial speculation tied to the introduction of Eurobonds, a European recovery initiative and development of the low carbon economy.
A further threat to general economic well-being in Europe seems to be posed by the banks. In the first hearing at the EP of the bosses of the new European Systemic Risk Board, a kind of economics super-watchdog, Mervyn King, the Governor of the Bank of England, declared ‘There are still many risks to the recovery of the European economy’. He warned against any increase in the interest rate and identified late June as a crucial time when governments must be ready to re-capitalise any banks that failed stress tests. It seems that, however well the northern Member States are doiing at the moment, a wrong-headed response to the troubles of the south could still bring their own house crashing down around them.

Bargaining round-up

IN LUXEMBOURG PAY NEGOTIATIONS USUALLY follow a prescribed course of discussions between government, employers and unions to set national rates. In 2010, however, agreeement proved impossible and the breakdown of talks was followed by unprecedented demonstrations. One of the protesters’ chief demands was the continued tieing of salary rises to the cost of living, a practice widespread in continental Europe which was attacked in the recent ‘pact for the euro’ (see our last issue). The government, anxious to get some sort of deal, held bipartite talks with unions and agreed to keep indexation if the increase was postponed to the third quarter of this year; they also raised the minimum wage by 1.9%. While a couple of unions criticised the deal, employers were more scathing and the government found itself in a second round of bipartite dicussions where they offered reduced contributions to the minimum wage, the work accident fund and sickness insurance to assuage them. Although the two-way talks seemed to have done the trick this time it is not clear if the traditional social dialogue method will be abandoned.

NORWEGIAN UNIONS RECORDED A VICTORY recently in public sector wage negotiations as they walked away with  4% and 4.3% increases for government and local authority employees respectively. This was the first time a negotiated settlement was possible since 2005, nationally, and 2007 locally. One of their main concerns was to catch up with the private sector whose unions achieved a 3.65% guideline figure in March. Officials from the LO, YS and Unio federations had high praise for the national deal describing it as ‘a very good rise for the lowest paid in the sector’ and confirming that it ‘takes care completely of the main demands we put forward’. They were more cautious on the local authorities’ agreement with Unio’s Mimi Bjerkestrand, bellieving that they ‘still have a job to do in order to give a better recruitment situation when it comes to people with higher education’.

FEDEX WORKERS AT THE COMPANY’S PARIS air hub showed their dissatisfaction with a 1% pay offer made recently by management of the US-based global delivery company by striking as part of a 3-day rolling programme. Pointing out that the firm’s Chief Executive Officer had previously sold $26 miilion in shares, the CGT, CFDT and FO unions representing the 700 staff demanded a 5% rise. They are also worried about the increasing use of ‘precarious’ temporary staff on much worse pay and benefits than full-time employees. Ingo Marowsky, the International Transport Federation co-ordinator, said ‘The company is boosting profits at the expense of vulnerable temporary and contract workers who, like all workers, deserve to be rewarded fairly’

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