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BackThis week, the Austrian Federal Minister of Labour, Social Affairs and Consumer Protection Rudolf Hundstorfer and the chairman of the German services trade union ver.di, Frank Bsirske harshly criticised the ideas of the European Commission concerning a coordinated EU economic policy within the framework of a panel discussion, which had been organised by the Brussels Office of the Austrian Trade Union Federation and the Austrian Federal Chamber of Labour. The EU Commissioner for Employment and Social Affairs László Andor tried to appease and commented that the social partners will continue to have the same rights as before.
Attended by the EU Commissioner for Employment and Social Affairs, László Andor, the Austrian Federal Minister of Labour, Social Affairs and Consumer Protection, Rudolf Hundstorfer and the chairman of the German services trade union ver.di, Frank Bsirske, the panel discussion on the subject of “Economic Governance, Competitiveness Pact, European Semester …” was made up of high-calibre participants. The reason for the discussion were proposals by the Commission as well as by German Chancellor Merkel and French Premier Sarkozy for a coordinated economic policy, which in the opinion of many labour representatives is a step in the wrong direction and would endanger the successful model of social partnership.
EU Commissioner László Andor: of apples and tomatoes
“I am used to very abrasive tones”, was the reaction of the Hungarian EU Commissioner for Employment and Social Affairs, László Andor, to the massive criticism of trade unions and labour representatives on the economic policy plans of the Commission, in particular the intervention into the right to free collective bargaining of the Member States. Compared to the proposals of the governments (keyword “Competitiveness Pact” by Merkel und Sarkozy), the “Annual Growth Report” proposed by the Commission was almost friendly, said the Commissioner. By presenting the “Annual Growth Report”, the Commission had intended to choose an approach, which was as coherent as possible with other key areas, such as the EU 2020 strategy, the European Semester or the Single Market Act. “What is the starting position of the Member States?“ had been the question of the Commission said Andor.
The economic recovery was still very weak and unevenly distributed. The “Annual Growth Report” had been prepared during a period of unrest at the financial markets. Its statements therefore had to be clear and to the point to regain the trust of the markets. It would be the overriding objective to prevent the Euro coming under attack from the markets, said the Commissioner. With regard to the harsh criticism of the trade unions concerning the mentioning of pensions and wages in the Commission document - policy areas, which traditionally fall under the jurisdiction of the Member States and the social partners - commented Andor that these were also included in the so-called Competitiveness Pact of the governments. However, he assured that the social partners would enjoy the same rights as before. However, he believed that wage development had to go hand in hand with the development of productivity and competitiveness. “The Annual Growth Report is an apple, the Competitiveness Pact a tomato”“, said the Commissioner, who finally urged no longer to cling to the past and not to lose sight of reality.
Bsirske: I do not believe Employment Commissioner Andor!
Frank Bsirske, chairman of the German services trade union ver.di, was in a fighting mood right from the start and voiced his doubts concerning the statements of Commissioner Andor that the EU would not call future social dialogue and wage-setting into question. Bsirske also does not see an end of the redistribution from the bottom to the top; on the contrary, the same pattern would be used as before the crisis. He regards the EU as being at a crossroads and called the construction of Maastricht as an aberration. Bsirske criticised that in the current debate the high national debt of some Member States was regarded as the root of all evil; the fact that these had been incurred because the states had to bail out the banks at great expense, was often forgotten. He regards the idea of ordering the deficit countries to adopt a moderate wage policy as a consequence as a step in the wrong direction. Instead, the financial markets should be better regulated. He also criticised the banks. Banks, said Bsirske, are able to get cheap money from the ECB, which they then give to states, which urgently need the money, as “expensive” loans. In this context, he argued for a bank for public bonds and criticised the current paradox governance. He finally demanded a greater involvement of Europe, however wants it to adopt another direction. In concrete terms, he wants more regulation, more coordination, more sources of income and a better approach against a competition to reduce taxes.
Federal Minister Hundstorfer: Social policy is not a luxury label, but a driving force for growth
The Austrian Federal Minister of Labour, Social Affairs and Consumer Protection, Rudolf Hundstorfer is in favour of improving the coordination of economic policy. However, what he was missing was social as well as growth and employment policy. Currently, the focus was only on competition and consolidation.
Hundstorfer comes clearly out in favour of introducing a Financial Transaction Tax as well as putting higher taxes on wealth. As a countermove the Social Minister called for reducing the tax burden on labour.
Hundstorfer also made clear which priorities have to be pursued: it was important to invest in employment and qualifications. For example, Austria was among the leaders with regard to youth employment. Although this was quite expensive, it would subsequently avoid high unemployment rates and new recipients of social benefits. The Minister of Labour and Social Affairs criticised the discussion on pensions, which was currently going on at EU level: it was no use to increase the statutory pension age; the actual pension age had to rise. But the problem was that 40 percent of people would make the transition from unemployment to retirement. Austria had taken measures to keep workers in employment for longer.
Hundstorfer finally remarked that not a reduction but a strengthening of the social partnership was required. In particular the integration of the social partners had been very helpful during the last two years of the crisis. Austria had benefitted from going down that route, as she and the Netherlands had the lowest rate of unemployment in the European Union.
The Federal Minister of Labour and Social Affairs condemned the proposal of German chancellor Merkel: to base wages on unit labour costs was in view of the different methods of calculating such costs within the EU not possible. Hundstorfer also criticised the renewed lowering of Greece's credit rating. The downgrading and the higher interest payments associated with it, would automatically increase Greece’s debt. This had to be paid by all. It is not long ago that the US banks had to be bailed out; this must be their way to thank the public sector, commented Hundstorfer. Finally, the Federal Minister of Labour and Social Affairs Rudolf Hundstorfer emphasised that social policy was not a luxury label, but a driving force for growth.
EU Commissioner László Andor: of apples and tomatoes
“I am used to very abrasive tones”, was the reaction of the Hungarian EU Commissioner for Employment and Social Affairs, László Andor, to the massive criticism of trade unions and labour representatives on the economic policy plans of the Commission, in particular the intervention into the right to free collective bargaining of the Member States. Compared to the proposals of the governments (keyword “Competitiveness Pact” by Merkel und Sarkozy), the “Annual Growth Report” proposed by the Commission was almost friendly, said the Commissioner. By presenting the “Annual Growth Report”, the Commission had intended to choose an approach, which was as coherent as possible with other key areas, such as the EU 2020 strategy, the European Semester or the Single Market Act. “What is the starting position of the Member States?“ had been the question of the Commission said Andor.
The economic recovery was still very weak and unevenly distributed. The “Annual Growth Report” had been prepared during a period of unrest at the financial markets. Its statements therefore had to be clear and to the point to regain the trust of the markets. It would be the overriding objective to prevent the Euro coming under attack from the markets, said the Commissioner. With regard to the harsh criticism of the trade unions concerning the mentioning of pensions and wages in the Commission document - policy areas, which traditionally fall under the jurisdiction of the Member States and the social partners - commented Andor that these were also included in the so-called Competitiveness Pact of the governments. However, he assured that the social partners would enjoy the same rights as before. However, he believed that wage development had to go hand in hand with the development of productivity and competitiveness. “The Annual Growth Report is an apple, the Competitiveness Pact a tomato”“, said the Commissioner, who finally urged no longer to cling to the past and not to lose sight of reality.
Bsirske: I do not believe Employment Commissioner Andor!
Frank Bsirske, chairman of the German services trade union ver.di, was in a fighting mood right from the start and voiced his doubts concerning the statements of Commissioner Andor that the EU would not call future social dialogue and wage-setting into question. Bsirske also does not see an end of the redistribution from the bottom to the top; on the contrary, the same pattern would be used as before the crisis. He regards the EU as being at a crossroads and called the construction of Maastricht as an aberration. Bsirske criticised that in the current debate the high national debt of some Member States was regarded as the root of all evil; the fact that these had been incurred because the states had to bail out the banks at great expense, was often forgotten. He regards the idea of ordering the deficit countries to adopt a moderate wage policy as a consequence as a step in the wrong direction. Instead, the financial markets should be better regulated. He also criticised the banks. Banks, said Bsirske, are able to get cheap money from the ECB, which they then give to states, which urgently need the money, as “expensive” loans. In this context, he argued for a bank for public bonds and criticised the current paradox governance. He finally demanded a greater involvement of Europe, however wants it to adopt another direction. In concrete terms, he wants more regulation, more coordination, more sources of income and a better approach against a competition to reduce taxes.
Federal Minister Hundstorfer: Social policy is not a luxury label, but a driving force for growth
The Austrian Federal Minister of Labour, Social Affairs and Consumer Protection, Rudolf Hundstorfer is in favour of improving the coordination of economic policy. However, what he was missing was social as well as growth and employment policy. Currently, the focus was only on competition and consolidation.
Hundstorfer comes clearly out in favour of introducing a Financial Transaction Tax as well as putting higher taxes on wealth. As a countermove the Social Minister called for reducing the tax burden on labour.
Hundstorfer also made clear which priorities have to be pursued: it was important to invest in employment and qualifications. For example, Austria was among the leaders with regard to youth employment. Although this was quite expensive, it would subsequently avoid high unemployment rates and new recipients of social benefits. The Minister of Labour and Social Affairs criticised the discussion on pensions, which was currently going on at EU level: it was no use to increase the statutory pension age; the actual pension age had to rise. But the problem was that 40 percent of people would make the transition from unemployment to retirement. Austria had taken measures to keep workers in employment for longer.
Hundstorfer finally remarked that not a reduction but a strengthening of the social partnership was required. In particular the integration of the social partners had been very helpful during the last two years of the crisis. Austria had benefitted from going down that route, as she and the Netherlands had the lowest rate of unemployment in the European Union.
The Federal Minister of Labour and Social Affairs condemned the proposal of German chancellor Merkel: to base wages on unit labour costs was in view of the different methods of calculating such costs within the EU not possible. Hundstorfer also criticised the renewed lowering of Greece's credit rating. The downgrading and the higher interest payments associated with it, would automatically increase Greece’s debt. This had to be paid by all. It is not long ago that the US banks had to be bailed out; this must be their way to thank the public sector, commented Hundstorfer. Finally, the Federal Minister of Labour and Social Affairs Rudolf Hundstorfer emphasised that social policy was not a luxury label, but a driving force for growth.