Austerity and Privatization: Impact on Public Services and Alternatives

2. Public services, austerity, alternativesJan Willem GoudriaanEuropean Federation of Public Service UnionsBrussels, 5 May 2012

3. 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) About EPSU

5. Bucharest 14 January 2012Protests 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to privatise health care (Private sector access to government funding while public services denied funding, proposals withdrawn by government, protests continue, more anger 19th)

6. 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.

7. 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

8. Table 1. Overview of fiscal austerity measures (source ILO)

9. “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) 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”

10. 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 Democracy?

11. 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

12. Reasons for optimism

14. 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

15. . Coalitions

17. 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

18. 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

19. www.epsu.org