Taken from the TUC’s Touchstone blog.
“My eight year stint as General Secretary of the ETUC ends shortly and I will return to the UK to try to make sense out of a new role in the House of Lords. I leave with mixed feelings – regret at leaving active engagement in the exciting European project, coupled with pleasant anticipation about working once again in London.
I leave with a sad sense that neither the EU, nor the UK for that matter, is in good shape, indeed worse than when I arrived eight years ago – not quite the epitaph for my stewardship that I intended.
The immediate cause of this is the financial crisis which crashed, like a tidal wave, into Europe in 2008. The crisis may have originated in the USA but the collapse of the subprime mortgage market there exposed Europe’s own property bubbles. Credit disappeared, industrial production dived, economies halted.
At first, the EU did well. Banks were propped up by Governments assuming responsibility for bad debts. Short-time working schemes, car scrappage schemes, and other stimuli packages kept the economy moving. We did not repeat the disastrous decisions of the 1930s to cut in a recession and so make things worse. Keynes’ lessons seemed well learned.
That is, until Greece in 2010! Then the crisis switched from the banks to the debts of member states with individual countries coming under threat. Whereas rescuing banks was easy to arrange – the major political decisions were taken quickly – rescuing countries is proving much more tortured and difficult. ‘Moral hazard’ was ignored when the banks were in trouble, but creditor member states are regarding debtor states as good-for-nothing, feckless spendthrifts, requiring as much punishment as help.
The Euro Plus Pact will operate generally in the Eurozone and six other countries from 2013, generalising the austerity approach unless countries’ economies are fully competitive with Germany in particular. Otherwise, it is clear that member states will have to lower wages, reduce pension entitlements, cut welfare and other public spending.
What is already evident is that the austerity measures are not working. Growth in Greece and Ireland, (and in the UK where the Coalition Government is prescribing similar medicine) is stagnant. The EU must alter its direction of travel. It must give growth much more help than just rely on the warm words of EU 2020. Economic governance cannot just be austerity governance.
It must give equality more prominence. It must do more to help the young who are the major casualties of the recession so far. It must restore the drive for a more sustainable environment and sustainable economies.
It must combat the rise of the eurosceptic and nationalist right who will wreck the EU if they ever come to power. And in democracies, that means the EU must have popular, attractive themes, not just grim news and harsh discipline.
There are some of the challenges I leave behind. I wish my successors well with them.
The ETUC Congress ran from 16th -19th May in Athens.