In October 1998, the executive committee of the European Trade Union Confederation adopted a statement on "Europe and the global crisis", calling upon European central banks and EU Member States to institute monetary and budgetary measures to counteract a global downturn. It is argued that inaction or an overcautious approach would prove more damaging for the global economy and employment.
Meeting on 8-9 October 1998, the executive committee of the European Trade Union Confederation (ETUC) adopted a statement on Europe and the global crisis, which outlines the response ETUC would like the European Union and the Member States to adopt to limit the negative impact of the economic crisis in Asia on European businesses and employment.
ETUC believes that, while the imminent arrival of Economic and Monetary Union (EMU) initially shielded Europe from the impact of the Asian crisis, adverse trade effects are now being felt in certain sectors. In its statement, the ETUC accuses the Community of complacency, claiming that it failed to recognise in its 1998-9 Broad Economic Guidelines the severity of the situation in Asia and its likely knock-on effect on the European Union .
The ETUC argues that the following measures are necessary to protect European economies from further ill effects and to assist the ailing economies of Russia, Latin America and Asia:
- a coordinated reduction of interest rates; and
- coordinated budgetary measures to counteract the threat of a severe economic downturn
The risks to European stability are seen to lie on the side of deflation, not inflation and measures are therefore considered necessary to stimulate demand. Budgetary situations are seen to have improved to the extent that for the European Central Bank to err on the side of caution is considered potentially more damaging.
In the light of the impact of a threat of a further economic downturn, the importance of a coordinated and effective review of the EU Employment Guidelines is considered vital (EU9810130F). In advance of the December 1998 European Council summit meeting, ETUC calls for an emphasis on: the reorganisation and reduction of working time; the promotion of equality between men and women; the formulation of new European targets; countering all forms of discrimination; ensuring that employment policies are properly financed; and strengthening the social partners' role in the overall process.
On the global level, the ETUC considers it vital that the EU speak with one voice. It supports the calls of the international trade union movement that:
- G-7 governments and central banks revise their monetary and budgetary policies so that they now also address the risks of global recession;
- a new "financial architecture" is introduced to counter speculation and to bring order to international capital markets;
- action is taken to restore value to world commodities, whose prices have fallen by 30% since 1997;
- the respect of fundamental workers' rights is promoted. Proposals for a Multilateral Agreement on Investment (MAI) - being prepared under the auspices of the Organisation for Economic Cooperation and Development (OECD) (FI9804159N) - would be totally unacceptable if the activities of multinational companies and banks were not properly regulated; and
- specific programmes are introduced for the worst-hit countries and regions, which take account of social as well as economic needs.