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BackThe latest study of the Directorate-General for Economic and Financial Affairs of the European Commission reads like a handbook of neoliberalism. Its authors argue on more than 160 pages that the reduction of social rights and labour law provisions would be the one and only proper way to promote employment and to tackle unemployment. A short glance towards Greece, Spain and Portugal is enough to debunk this mistaken logic. The report leaves no doubt that neoliberal reforms are in reality an offensive against employees.
Competent Ministers of Labour and Social Affairs losing their right to participation
The recently published study “Labour Market Developments in Europe 2012” was drafted by the Directorate-General for Economic and Financial Affairs. For the most part, the report repeats and evaluates the labour market reforms, which were adopted by the EU over the past ten years. Particular focus is placed on the last years of the crisis as many often far-reaching and to a large extent negative labour market and social reforms were introduced during this period. Only the Ministries of Finance and Economy of the individual Member States, as well as allegedly the Directorate-General for Employment were consulted prior to the publication of the report. What is amazing and more than odd is the fact that the Ministries of Labour and Social Affairs of the countries were not involved, in spite of their obvious competence concerning this subject. Hence the strict neoliberal orientation of the report does not come as a surprise.
„...reform activity will start bearing fruit...”
The report notes right at the beginning that since the outbreak of the crisis the Member States of the European Union had increasingly carried out labour market reforms. Often very ambitious reform programmes were adopted with public deficits clearly in the driving seat. The measures, which basically went in the desired direction, were given priority at European level. Consequently some countries thoroughly reformed their health and safety regulations and their systems of actual wage determination. According to the authors of the study, the reform path adopted will lead to more growth and create jobs.
Following the praise for the reform efforts of the European Member States, the report addresses a problem of the European labour market: rising unemployment. Here in particular one can recognise significant differences between the Member States. Countries that have to tackle a substantial deficit are affected by a “worrying” rise in unemployment. Instead of concluding from this “worrying” aspect that current reform measures have only made the situation worse, the report of the European Commission feels vindicated. Competition had to be further increased to generate jobs and growth. The type of measures the report is referring to are detailed in its Annex.
Reforms to achieve “better employment results”
Among the Annexes of the report is a list of labour market measures, which are referred to as “employment friendly reforms”. These include among other the following reforms: unemployment benefits shall be less “generous” and the eligibility for benefits shall be more strictly regulated. “Generosity” shall also be decreased and eligibility conditions tightened for work-related benefits and assistance as well as for pensions. Protection regulation for dismissals is another area that requires reform and where hard-won rights shall be weakened. The neoliberal authors of the study did certainly not beat about the bush when explaining the “need to reform” collective bargaining systems. Statutory minimum wages shall be decreased and a “less centralized” bargaining system is required. The report makes no secret of the objective of the desired measures - “a reduction in the … powers of the trade unions”.
What consequences this neoliberal policy has on employees is most visible in the crisis-ridden countries in Southern Europe. After all, above all, these Member States experienced an acceleration of planned reforms, as pointed out by the study on several occasions. Record unemployment, poverty and a drastic decline in the quality of life for a large part of the population are the visible consequences of neoliberal reform policy. However, the coordinated cross-border strike last week has shown that employees will not simply put up with these attacks on their lives and their hard-won rights!
Further information
Labour Market Developments in Europe, 2012
The recently published study “Labour Market Developments in Europe 2012” was drafted by the Directorate-General for Economic and Financial Affairs. For the most part, the report repeats and evaluates the labour market reforms, which were adopted by the EU over the past ten years. Particular focus is placed on the last years of the crisis as many often far-reaching and to a large extent negative labour market and social reforms were introduced during this period. Only the Ministries of Finance and Economy of the individual Member States, as well as allegedly the Directorate-General for Employment were consulted prior to the publication of the report. What is amazing and more than odd is the fact that the Ministries of Labour and Social Affairs of the countries were not involved, in spite of their obvious competence concerning this subject. Hence the strict neoliberal orientation of the report does not come as a surprise.
„...reform activity will start bearing fruit...”
The report notes right at the beginning that since the outbreak of the crisis the Member States of the European Union had increasingly carried out labour market reforms. Often very ambitious reform programmes were adopted with public deficits clearly in the driving seat. The measures, which basically went in the desired direction, were given priority at European level. Consequently some countries thoroughly reformed their health and safety regulations and their systems of actual wage determination. According to the authors of the study, the reform path adopted will lead to more growth and create jobs.
Following the praise for the reform efforts of the European Member States, the report addresses a problem of the European labour market: rising unemployment. Here in particular one can recognise significant differences between the Member States. Countries that have to tackle a substantial deficit are affected by a “worrying” rise in unemployment. Instead of concluding from this “worrying” aspect that current reform measures have only made the situation worse, the report of the European Commission feels vindicated. Competition had to be further increased to generate jobs and growth. The type of measures the report is referring to are detailed in its Annex.
Reforms to achieve “better employment results”
Among the Annexes of the report is a list of labour market measures, which are referred to as “employment friendly reforms”. These include among other the following reforms: unemployment benefits shall be less “generous” and the eligibility for benefits shall be more strictly regulated. “Generosity” shall also be decreased and eligibility conditions tightened for work-related benefits and assistance as well as for pensions. Protection regulation for dismissals is another area that requires reform and where hard-won rights shall be weakened. The neoliberal authors of the study did certainly not beat about the bush when explaining the “need to reform” collective bargaining systems. Statutory minimum wages shall be decreased and a “less centralized” bargaining system is required. The report makes no secret of the objective of the desired measures - “a reduction in the … powers of the trade unions”.
What consequences this neoliberal policy has on employees is most visible in the crisis-ridden countries in Southern Europe. After all, above all, these Member States experienced an acceleration of planned reforms, as pointed out by the study on several occasions. Record unemployment, poverty and a drastic decline in the quality of life for a large part of the population are the visible consequences of neoliberal reform policy. However, the coordinated cross-border strike last week has shown that employees will not simply put up with these attacks on their lives and their hard-won rights!
Further information
Labour Market Developments in Europe, 2012