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ISSUE 58 page 2

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Second EU financial pact makes things even worse say unions
 WE REPORTED OVER A YEAR AGO ON THE EU’S ‘ECONOMIC GOVERNANCE’ rules which clamped down on Member States’ budgets (see issue 53) as part of the ‘six-pack’ reinforcing the existing stability and growth pact. This was allied to the ‘Euro+ pact’ which dealt with more specific measures affecting the labour market in each country, designed ‘to hold down wages, particularly in the public sector, decentralise pay bargaining, eliminate the indexing of salaries to inflation and reduce social benefits and pensions while raising the retirement age’ (see issue 54). Trade unions condemned the  pact as lacking any strategy for growth and, instead, starting a ‘race to the bottom’ whereby workers’ wages and conditions would be worsened reducing spending power and therefore causing further deflation of the economy, larger budget deficits and renewed cuts. Now a new treaty has further tightened up the rules and continued down the same road of austerity. It commits the 25 EU Member States who signed it (the U.K. and the Czech Republic did not) to restrict any annual budget deficit to less than 0.5% of the size of their economy (GDP) and allows cases to be brought before the European Court of Justice (ECJ) by any country that believes another has breached the rule. The ECJ will be empowered to levy a lump sum penalty of up to 0.1% of the offending Member State’s GDP. Any country whose total national debt exceeds 60% of GDP must reduce it by at least 5% per year.


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Trade union objections to the treaty were twofold: firstly despite much recent talk of stimulating economic growth the budget restrictions will lock countries into deflation and cuts as they will be required to write them into national legislation and, secondly,  the agreement’s formulation as an  international treaty, chosen because not all Member States signed up, has led to a ‘democratic deficit’ in the process. According to Veronica Nilsson, a legal expert from the European Trade Union Confederation (ETUC) ‘The European parliament was just an observer and the social partners were not involved or consulted’. It has also made it impossible to add a ‘Social Progress Protocol’ as favoured by unions when the next proper EU treaty revision is made in the usual way. The ETUC continued its campaign for a Financial Transactions Tax (FTT), Eurobonds and the closing of tax havens in widespread demonstrations before the summit at which the treaty was agreed. Afterwards General Secretary Bernadette Ségol welcomed EU leaders’ talk of economic growth but deplored the lack of resources provided for it and their  ongoing stress on deregulation and holding down wages. ‘the European Union has decided to press on down the path of permanent automatic austerity. This is a losing strategy, because this decision cripples any chance of economic recovery and will stoke social unrest’

Demonstrations in Italy and Portugal



Bargaining round-up

AUSTRIAN UNIONS TOOK THE UNUSUAL STEP OF withdrawing their labour recently after failing to reach agreement on pay rises in the metalworking sector. There have been no strikes in this industry for 25 years but trade union negotiators were looking for an ‘ambitious’ salary increase of 5.5% to compensate for inflation and to share in recent company profits. Trouble was presaged when both sides’ demands were made public and the final employer offer of 3.65% plus a €200 one-off payment left a big gap between them. Following a 2-day strike by 100,000 workers in 200 companies agreement was reached. The average of 4.2% is 2.2% above expected inflation and is weighted towards lower-paid workers, parental leave will also be increased.
TRADE UNIONS IN MALTA GAINED A NEW RECRUIT when the government confirmed that the Malta Police Association could become one of their number. Until now police, soldiers, civil protection workers and prison guards have been forbidden by law from joining unions. However by simply converting the association the government has disappointed union federations, firstly because the other banned categories of worker were left out of the reform and, secondly, by the creation of a ‘house union’ which is the only option open for police officers to join. The General Workers’ Union also believes that freedom of association will still be restricted by the Police Act and plans to report the ‘cosmetic’ measure to the relevant European confederations.
A LONG-RUNNING CAMPAIGN IN BELGIUM known as ‘white rage’ has resulted in an extensive agreement for employees of non-profit organisations in the health, social and cultural sector. The Flemish regional authorities, covering 150,000 workers in the north of the country, made a deal with unions, following a strike in June, which will run until 2015. €62 million has been allocated to fund an extra month’s pay for all but a total of €130 million will go on a job classification scheme, that will enable career paths and training needs to be identified, as well as measures to improve work/life balance, lengthen career breaks to a maximum of five years, enable longer holidays and to create 3,600 new jobs to reduce workloads. Employers’ contributions to pension plans will also increase. While trade unions are generally pleased with the agreement, workers employed by the Federal government are currently excluded due to the failure of national politicians to form a coalition for over a year and a half after the last election.

Deal means Alstom China move will not cost jobs

ALSTOM, A FRENCH ENGINEERING COMPANY HAS SIGNED a deal with the European Metalworkers’ Federation (EMF) to protect European jobs whilst it sets up a joint venture with Chinese firm Shanghai Electric to manufacture boilers. The multi-national maker of trains, power stations, wind and hydro-electric turbines employs 93,000 people in 100 countries including 55,000 in Europe, mainly in France, Germany and the U.K. It is anticipated that approximately 4,000 staff will be transferred including some at Ashby-de-la-Zouch in Leicestershire. In consultation with its European Works Council (EWC) the agreement ensures that:

The deal will run until 2014 when the new company should have set up its own EWC, guided by a special transitional body and approved by management and unions in the joint venture.


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