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BackOn January 8, the Troika came once again under scrutiny of the European Parliament, or to be precise of the Committee of Employment and Social Affairs. The severe austerity measures made countries, which are monitored by the Troika made up of European Commission, European Central Bank (ECB) and International Monetary Fund (IMF), also slide into a serious social crisis. Hence, the Committee invited critical experts, who were asked to outline the mistakes made by the Troika. Almost simultaneously, the EU Commission answered the written questions of the Committee on Economic and Monetary Affairs concerning its role in the Troika.
Experts deliver harsh verdict
The Committee had invited four experts, José Silva Peneda, President of the Economic and Social Council (CES) of Portugal, Raymond Torres, Director of the International Institute for Labour Studies at the International Labour Organisation (ILO), Petros Stangos of the Council of Europe, as well as Torsten Schulten Head of Unit for the Labour and wage policy at the German Institute for Economic and Social Research. All four agreed that the programmes had been conceived too unilaterally, put too much emphasis on austerity policy and as a result contributed vastly to the economic and social crisis.
Petros Stangos of the Council of Europe condemned the massive violation of social rights as they have been laid down as an internationally binding treaty in the European Social Charter. The policy of the Troika seriously disregards these chartered fundamental rights, which as a result have been neglected in the design of the programmes.
Torsten Schulte gave a detailed account of the impact the policy had on trade union rights and consequently also on wages and salaries. Initially, wages had directly or indirectly fallen in all programme countries; this had been achieved by freezing or even reducing public service salaries and minimum wages. However, what in the opinion of the labour market expert would have even more long-term and more dramatic effects, are the interventions in the drafting of collective agreements, which could be observed in all these countries. The Troika pursues a neoliberal policy, which the Commission considers a model for all countries. However, in countries under supervision of the Troika it would have the opportunity of directly enforcing and ticking off its targets by way of a kind of “checklist”. The policy pursued by the Commission would aim at decentralising collective agreements, in particular with the thought in mind that they would cover fewer employment relationships. The general intention is to push back the power of trade unions to set wages. All programme countries had experienced a watering down of collective agreements in individual sectors; in Portugal for example, the figure of employees covered by collective agreements today had fallen to 300,000, whilst in 2008, their number still stood at almost 2 million.
The two other experts in particular criticised the strangling of the economy by the austerity policy, the loss of trained employees by emigration, as well as the rise of youth unemployment.
Most MEPs also voiced criticism. However, it also became clear that Parliament hardly has any opportunities to change the socially disastrous agenda of the Troika or to challenge this construct, which is problematic in terms of democratic politics.
The Commission does not assume any responsibility
Whilst Members of the EU Parliament critically reflected on the social consequences of the crisis management, the Commission published at the same time the written replies to a total of 29 questions, which had been asked by MEPs represented in the Committee of Employment and Social Affairs. The answer to these questions may be viewed as a mockery of MEPs and thereby also of Europe’s citizens. Spread over 16 pages, the Commission manages to repeat the same over and over again, saying nothing in the end. The Commission is obviously concerned with distancing itself from the responsibility for the wrong and social disastrous policy of the crisis management. Concerning the concrete formulation of the policy, as it has been laid down in memoranda, responsibility is shifted to the finance ministers of the lenders on the one hand and to the governments of the Member States affected themselves on the other. The Commission tries to give the impression, as do the other institutions of the Troika, that they assume an apolitical and mediating role between the states of the Eurozone and the programme countries. According to this interpretation, their task is of a purely technical nature; the adjustment programmes were mainly designed by the states affected; the Commission would only check the figures. This retreat to the ideology of technocracy is highly implausible, given the fact that the adjustment programmes follow the same neoliberal example in all programme countries. How directly the programme countries implement the labour market policy agenda of the Commission for example, has been convincingly demonstrated by Torsten Schulten in the Committee of Employment and Social Affairs.
Further information:
Questionnaire to the European Commission "Design a No Adoption of the Financial Assistance Programmes"The Committee had invited four experts, José Silva Peneda, President of the Economic and Social Council (CES) of Portugal, Raymond Torres, Director of the International Institute for Labour Studies at the International Labour Organisation (ILO), Petros Stangos of the Council of Europe, as well as Torsten Schulten Head of Unit for the Labour and wage policy at the German Institute for Economic and Social Research. All four agreed that the programmes had been conceived too unilaterally, put too much emphasis on austerity policy and as a result contributed vastly to the economic and social crisis.
Petros Stangos of the Council of Europe condemned the massive violation of social rights as they have been laid down as an internationally binding treaty in the European Social Charter. The policy of the Troika seriously disregards these chartered fundamental rights, which as a result have been neglected in the design of the programmes.
Torsten Schulte gave a detailed account of the impact the policy had on trade union rights and consequently also on wages and salaries. Initially, wages had directly or indirectly fallen in all programme countries; this had been achieved by freezing or even reducing public service salaries and minimum wages. However, what in the opinion of the labour market expert would have even more long-term and more dramatic effects, are the interventions in the drafting of collective agreements, which could be observed in all these countries. The Troika pursues a neoliberal policy, which the Commission considers a model for all countries. However, in countries under supervision of the Troika it would have the opportunity of directly enforcing and ticking off its targets by way of a kind of “checklist”. The policy pursued by the Commission would aim at decentralising collective agreements, in particular with the thought in mind that they would cover fewer employment relationships. The general intention is to push back the power of trade unions to set wages. All programme countries had experienced a watering down of collective agreements in individual sectors; in Portugal for example, the figure of employees covered by collective agreements today had fallen to 300,000, whilst in 2008, their number still stood at almost 2 million.
The two other experts in particular criticised the strangling of the economy by the austerity policy, the loss of trained employees by emigration, as well as the rise of youth unemployment.
Most MEPs also voiced criticism. However, it also became clear that Parliament hardly has any opportunities to change the socially disastrous agenda of the Troika or to challenge this construct, which is problematic in terms of democratic politics.
The Commission does not assume any responsibility
Whilst Members of the EU Parliament critically reflected on the social consequences of the crisis management, the Commission published at the same time the written replies to a total of 29 questions, which had been asked by MEPs represented in the Committee of Employment and Social Affairs. The answer to these questions may be viewed as a mockery of MEPs and thereby also of Europe’s citizens. Spread over 16 pages, the Commission manages to repeat the same over and over again, saying nothing in the end. The Commission is obviously concerned with distancing itself from the responsibility for the wrong and social disastrous policy of the crisis management. Concerning the concrete formulation of the policy, as it has been laid down in memoranda, responsibility is shifted to the finance ministers of the lenders on the one hand and to the governments of the Member States affected themselves on the other. The Commission tries to give the impression, as do the other institutions of the Troika, that they assume an apolitical and mediating role between the states of the Eurozone and the programme countries. According to this interpretation, their task is of a purely technical nature; the adjustment programmes were mainly designed by the states affected; the Commission would only check the figures. This retreat to the ideology of technocracy is highly implausible, given the fact that the adjustment programmes follow the same neoliberal example in all programme countries. How directly the programme countries implement the labour market policy agenda of the Commission for example, has been convincingly demonstrated by Torsten Schulten in the Committee of Employment and Social Affairs.
Further information: