Transcript Document

Public services, austerity, alternatives
Jan Willem Goudriaan
European Federation of Public Service Unions
Brussels, 5 May 2012
About EPSU
 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)
Bucharest 14 January 2012
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proposals withdrawn by government, protests continue, more anger 19th)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.
The impact of the crisis on the public sector
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
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 cuts; (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
2010–12
Romania
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
Slovenia
Announcement to reduce budget deficit by investment cuts (rather than public sector cuts)
Spain
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
Estonia
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Netherlands
Portugal
Turkey
United
2011–14
2010–13
2010–14
2010–14
2011–13
2009–10
2009–10
2009
onwards
2011–15
2010–13
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 developments
Economic Policy and Institutional Changes
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 on Treaty
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
Reasons for optimism
Our Alternatives
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
.
A European Struggle – new EU ?
Local and national resistance as part of
European approach for change
Coordination at EU level – EU mobilisation
Support for actions
Continued discussion in union movement on
stronger coordination of collective bargaining to
confront precarious work, low pay, (youth)
unemployment
And to resist attack on right to strike (Monti II)
Coalition building
In Short
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
www.epsu.org