This week, AK EUROPA, the Brussels Office of the Austrian Federal Chamber of Labour together with the Brussels Office of the Austrian Federation of Trade Unions ÖGB, the Chamber of Labour Saarland, the Chambre des Salariés Luxembourg and IG Metall hosted a high calibre panel discussion on the subject of austerity policy.

After a short welcome address by Hans Peter Kurtz, President of AK Saarland, and Alain Fickinger, Vice President of the Chambre des Salariés Luxembourg, Jörg Bibow presented a Study, which was written together with Heiner Flassbeck. Its content confirmed what many had already suspected: austerity policy and real wage reductions are the actual evil of the long-lasting economic crisis. A neoliberal agenda, based on false and unrealistic assumptions, prolongs the crisis rather than ending it.

During the subsequent high level panel discussion, AK President Rudi Kaske emphasised the importance of the study, which makes it possible to debunk the EU crisis policy, both profoundly and scientifically. Furthermore, the strengthening of right wing populist parties or of BREXIT had to be viewed in this context. Once more, Kaske demanded equal pay for equal work and emphasised the importance of a golden investment rule.

Wolfgang Lemb, Member of the Executive Committee, IG Metall, made some critical remarks – not only in respect of austerity policy, but also referring to the so-called “Juncker Plan”. The latter would not make new money available, but only reallocate existing funds. However, what Europe – not least because of the recent challenges in the USA – needed, was an increase in demand, which is why existing funds would not be sufficient.

The new Deputy General Secretary, European Trade Union Confederation (ETUC), Katja Letho-Komulainen, emphasised the importance of creating new, but also better quality jobs. She further addressed the mutual lack of coordination of European Member States. Public investments would not only be necessary in the crisis countries, but in the entire EU.

“The relation between austerity policy, decreasing wage level and falling purchasing power should increasingly be taught at universities, in order to counter the neoliberal mainstream there”, said Bernhard Achitz, Secretary General of the ÖGB. National budgets cannot be compared to a household budget. However, time and again, the Commission would ignore these approaches.

It was high time to take action, before right wing populist parties would come into power and called the EU per se into question, commented Heiner Flassbeck, the author of the study. Only a fundamental correction of the wage policy, supported by strong trade unions, would provide a remedy.

Further information:

Abridged presentation of the study

Long version of the study

AK Study: Why the economies of the eurozone are lagging behind the USA and Great Britain since the financial crisis

Blog Arbeit-Wirtschaft: Austerity policy in the eurozone: a shot in the foot

Photos of the event