Jan Willem Goudriaan
European Federation of Public Service Unions

 8 Million Members in 275 Trade Unions in 47 countries in Europw, 60% women, member ETUC local and regional government (municipalities); central government and EU administration health and social services utilities (electricity, gas, water, waste)

Protests turn violent over proposed legislation that seeks to privatise health care
(Private sector access to government funding while public services denied funding, proposals withdrawn by government, protests continue, more anger 19th)

• BILD: The French President said that Europe should learn from the German model …
• Draghi: …he’s right. Long before him I said that Germany is a model. The old European welfare state model is in fact dead , because it had to make debts far too often. The Germans have re-invented it – with no excessive debts.
• BILD: Do you have a message for the people of Germany?
• Draghi: Keep it up!
• ILO (2012) Germany is contributing to problems of the
Eurozone. Wage deflation, growing inequalities, low wage economy. Other economies have to refer to wage - downward spiral.

Severe constraints on public budgets has resulted in:
Reductions in public sector employment
Cuts in pay and pensions
Cuts in social protection, coupled with increases in direct and indirect taxation, and increases in pension age
Ongoing cuts are affecting employees working for the general interest, in health, social security, education, culture and arts, environment, justice and prison services through to providing energy and waste services.
Privatisation, PPPs, commercialisation of PS lead to corporate welfare
Quality of services and the general interest effected and long term negative consequences
Threats to the autonomy of collective bargaining and democratic accountability arising from EU/IMF conditions

Table 1. Overview of fiscal austerity measures (source ILO)
Denmark
Estonia
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Netherlands
Portugal
Romania
Nominal freeze of several social benefits (unemployment, student financial aid, welfare) and foreign aid; reduction in duration of unemployment benefits; cuts in salaries of ministers by 5 per cent (around 2 billion Kroner); introduction of ceiling on family benefits; higher excise duties on unhealthy foods and tobacco
Increase of VAT (2 percentage points) and excise taxes; reduction in social benefits (health, pensions); operating spending c uts; (temporary) increase in second pillar pension contributions; land sales; discretionary spending cuts
Cuts in public pensions, healthcare and public administration; raising of retirement age (from 60 years to 62 years by 2017); increase in taxes on capital; increase in top income tax rate by 1 percentage point
Yearly consolidation of
€25 billion from additional taxes (banks, air traffic, nuclear power; total around €8 billion); cuts in spending on social security and labour market policies (around €8 billion); cuts in military and administrative expenses (around €5 billion)
Elimination of tax exemptions; increase in property taxes; higher excise tax on cigarettes and alcohol; higher tax on mobile telephones and petrol; special levy on profitable firms and on high-value real estate; 10 per cent reduction in general government expenditure on salary allowances; public sector recruitment freeze in 2010 and partial replacement of retiring civil servants; reduction in operating costs and subsidies for pension funds; significant reduction in the number of public sector special committees; amalgamation and drastic reduction in the number of the public bodies/entities linked to local authorities
Introduction of 16 per cent flat rate of income tax over two years; cuts to the public sector (reduction of wages, elimination of certain benefits); sixyear tax for financial institutions; reduction of bureaucracy for investors; ban on foreign exchange mortgages
Tax increases and spending cuts (public sector wages, social welfare benefits
2010 –13
2011 –14
2010
–13
2010
–14
2010 –14
2011 –13
2009
–10
Public sector hiring freeze and public sector wage cuts (for civil servants with gross salary above €75,000); cuts in healthcare spending; strengthening of efforts against tax evasion; reduction in transfers from central to regional and local governments
Increase of VAT (3 percentage points); introduction of capital income tax; increase of personal income flat tax rate (3 percentage points); broadened base for property tax; public sector wage cuts; pensions cuts; structural reforms in public administration; education and healthcare
(revenue vs. spending consolidation in the ratio 20:80)
Cuts in salaries of politicians; reduction in military appropriations; scrap indexation of minimum wages; revision of maternity leave allowances; rationalization of public expenses; increase of personal income tax flat rate to 20 per cent; increase of excise taxes (fuel, tobacco, gambling); introduction of a corporate tax on agricultural entities
Consolidation effort of
€18 billion until 2015 (around 3 per cent of GDP), with cuts concentrated in social security reforms (tighter eligibility criteria for childcare allowance, disability and unemployment benefits), development cooperation and military spending
Reduction in public sector pay and hiring (15 per cent reduction of central government services and managerial positions compared with 2010); increase of VAT and taxes on high-income earners; freezing of pensions, except for the lowest pensions; special contribution on pensions above
€1,500; reform of the unemployment benefit system.
25 per cent reduction in public sector wages; 15 per cent reduction in pensions and unemployment benefits
2010
2009
2009 onwards
2011
2010
–12
–10
–15
–13
Slovenia
Spain
Turkey
United
Kingdom
Announcement to reduce budget deficit by investment cuts (rather than public sector cuts)
Cut in public sector jobs (13,000 jobs) and pay (salary cuts of 5 per cent for civil servants and of up to 15 per cent for ministers and mayors); introduction of new income tax; scrapping of newborn benefits; reduction in public investments by
€6 billion; cuts in public pensions; sale of public sector assets: one-third of public enterprises shall be closed or sold off
Introduction of the “fiscal rule bill”, including cuts in social security, local and provincial administration and unemployment benefits and levies for firms with floating capital
Emergency measures: abolition of the Child Trust Fund and cutting of employment programmes
(Young Person’s Guarantee fund), civil service recruitment freeze. One-quarter of higher revenues shall be achieved by tax increases: increase in VAT (2.5 percentage points)
2010 –13
2010 onwards
2010

The European Central Bank’s secret Italian letter
“The Italian Government has decided to pursue a balanced budget in 2014 and, to this purpose, has recently introduced a fiscal package. These are important steps, but not sufficient”
“a) A comprehensive, far-reaching and credible reform strategy, including the full liberalisation of local public services and of professional services is needed. This should apply particularly to the provision of local services through large scale privatizations .”
(For context – Italian people voted NO to privatisation of local municipal services in a Referendum in June 2011)

EU financial supervisory authories
European Semester (annual growth survey and recommendations)
EuroPact plus
Legislative measures (6-pack) and new 2 pack
Programme Countries (Greece, Ireland, Portugal)
EFSF to become ESM
Role for the IMF (Latvia, Roumania, Hungary, Ukraine, etc. ),
SPIV (getting Chinese money)
Increased role for the ECB (not just monetary – secret letters)
Task Force on Greece.
Spain & Italy forced to take measures. Italy to be monitored
Increased economic coordination with Euro-summit institutionalised
Permanent Euro WG President, “reinforced surveillance beyond 6 pack”
Commissoner with enforcement powers
New Treaty proposed

ETUC rejects approach to impose ever stricter austerity. Fiscal discipline alone, in the absence of recovery and investment measures, is dragging countries into crisis. Employment and social justice are top priority today for millions of Europeans.
Treaty does not address challenges created by the crisis. New treaty may further strengthen the obligation of member states to adopt fiscal policies that will accentuate rigid economic rules. A fiscal compact must go hand in hand with a social contract for Europe. It must give priority to investments that promote a sustainable economy, quality jobs and social justice, while combating inequalities.
“Europe must not become synonymous with sanctions and rigid fiscal policies. It must be identified with prosperity and must offer prospects for the future.
" Debate and consultation are required. Process is not democratic
The ETUC calls for the adoption of a social protocol to the treaties that guarantees respect for fundamental social rights and social protection. A clause protecting the wage formation must also be adopted

 Address inequalities, macro-economic imbalances, greed and strengthen the public services
 Respect autonomy of the social partners and increase coverage by collective agreements
 Financial Transaction Tax at EU level; Wealthy; Tax
Justice; Financial Regulations
 System of Eurobonds, European Public Bank
 Solidarity mechanisms to assist countries hit; to manage part of public debt
 EU investment programme (1% of GDP) in infrastructure, low carbon economy, public services
 Address precarious work and low pay

.

Support for actions
And to resist attack on right to strike (Monti II)

 More and better jobs: Investment in an expanded European recovery plan
 Stronger welfare systems to provide more security and avoid social exclusion
 Stronger workers’ rights and an end to the dominance of the short-termist market principles . Priority to social rights and collective action
 Better pay : stronger collective bargaining .
 European solidarity as a protection against the excesses of financial capitalism