European public service unions’ response to financial and economic crisis
After having presented in April 2009 an analysis of the economic crisis in the European public services sector, on 9 June 2009, the delegates attending the 8th Congress of the European Federation of Public Service Unions adopted a resolution on the financial and economic crisis and its consequences for the public sector and the economy at large. The federation declared that it will seek to prevent that the current crisis is used to diminish the role of government and public services.
EPSU Congress adopts resolution on economic and financial crisis
At the 8th Congress of the European Federation of Public Service Unions (EPSU), which took place from 8 to 11 June 2009 in Brussels, the delegates unanimously adopted a resolution entitled ‘The financial and economic crisis: Consequences for the public sector and the economy at large’. The European industry federation agreed on a set of action points to tackle the economic and financial crisis. These include:
- the promotion of and increased investment in public infrastructure and services in order to encourage stability;
- a European Central Bank (ECB) that puts people first by promoting policies to prevent mass unemployment;
- strict regulation of the banking sector and financial products to ensure that their main function is to support the real economy.
In its analysis of the financial and economic crisis, which had already been presented in April 2009, EPSU argues that an adequate strategy to address the crisis requires the involvement of the social partners.
Regulating the financial markets
From the trade unions’ point of view, one of the main areas of action concerns the regulation of the financial markets. According to the analysis presented by the public service trade unions, the financial rescue of banks has been carried out with limited consideration for the long-term consequences. EPSU states in its analysis that the financial investments in European banks increase the public debts and that there is only limited transparency regarding how governments and the ECB will recuperate these funds. Therefore, EPSU demands that governments use the public money invested in the financial system to seek fundamental changes, particularly increasing control, transparency and democratic governance with a focus on long-term investment – especially in public infrastructure, public services and an environmentally and socially sustainable economy.
Wage policy to counter deflation
Wage policy constitutes another important pillar of economic policy measures. According to the trade unions, the economic crisis has put the issue of wage moderation at the centre of political and economic debate. The trade unions highlight the risk that the recession could be used as a reason to restrain wage increases also in the European energy sector, albeit the significant increases in profits from which the major European energy companies have benefited since 2001–2002.
The unions point out that wage moderation has been a characteristic of European collective bargaining in all sectors of the economy for more than 10 years. Eurostat data show, in fact, that during the period 2002–2007, salaries accounted already for a decreasing share of European gross domestic product (GDP). According to EPSU, the focus on wage moderation would not only reinforce a trend that was apparent even before the economic crisis took hold, but would also fail to deliver any positive outcome in terms of employment.
Case example of energy sector
In the view of the trade unions, the processes of liberalisation and privatisation implemented across the European Union entailed a trend of rising profits and falling employment in the energy sector. A major study carried out for the electricity and gas social dialogue committees confirms that the electricity and gas sectors have lost about 300,000 jobs over the previous decade.
On the other hand, the analysis carried out by EPSU of the annual reports of 10 of the major companies in the energy sector reveals common trends in terms of profits, dividends and the wage share. The 10 companies are Centrica (UK), CEZ (Czech Republic), EDF (France), ENEL (Italy), E.ON (Germany), Essent (Netherlands), Iberdrola (Spain), RWE (Germany), Verbund (Austria) and Vattenfall (Sweden). Looking at the past nine years beginning with 2001–2002, virtually all of the 10 companies show significant increases in profits and the total dividend payout. By analysing the wage and salary bill – excluding pension and other social security contributions – in each company and calculating it as a percentage of profits, a falling share of wages is evident in nine out of 10 companies. All 10 companies registered a significant fall in wages as a proportion of dividends.
In conclusion, EPSU is asking for decent salary increases to counter deflation and stimulate demand. Furthermore, the European industry federation is claiming more investment, in particular in ‘green’ alternatives, as measures to recover from the crisis. Finally, EPSU declares that the trade unions in the energy sector will seek to prevent that the economic crisis is used to diminish the role of government and public services. According to EPSU, governments are needed to ensure leadership to combat poverty, ensure health, address climate change and invest in public infrastructure.
Volker Telljohann, IRES Emilia-Romagna, Bologna