Outcome of the meeting of Finance Ministers strongly criticized

Results of the Council

The Council kicked off the 2011 "European Semester", examining the Commission's annual growth survey and drawing lessons from an assessment of the member states' draft national reform programmes.

The "European Semester" is implemented for the first time this year as part of a reform of EU economic governance; it is aimed at ensuring better-coordinated and more effective policies for putting Europe's economy on a path to sustainable growth.

The Council also discussed the follow-up to the December European Council as regards the strengthening of EU economic governance and the establishment of a new mechanism to ensure the stability of the euro area. Economic governance was cited as a key priority by the Hungarian presidency, which presented its work programme to the Council. The presidency stated its goal of reaching agreement on six legislative proposals on economic governance by the end of March.

The Council also approved visa facilitation and readmission agreements with Georgia, both entering into force on 1 March 2011. The visa facilitation agreement will make it easier and
cheaper for Georgian citizens to acquire short stay visas (up to 90 days per period of 180 days) for travels to and throughout the EU.

Click here to read the press release.

ETUC comments on the Council: The European Trade Union Confederation (ETUC) reminds finance ministers that labour market flexibility does not create more jobs.

The European Council of Finance Ministers, meeting today will undoubtedly repeat its traditional call for more labour market flexibility when discussing the sovereign debt crisis and the launch of the European Commission’s Annual Growth Survey.

The European Trade Union Confederation (ETUC) reminds finance ministers that labour market flexibility does not create more jobs. Flexibility simply promotes precarious work, drives out good jobs, and creates high and rising inequalities.

Labour market flexibility is at the root of this crisis: in the absence of demand growth led by decent wages and stable contracts, debt booms had to take over and drive aggregate demand forward. When these debt booms went bust, they wrecked the economy and the financial system: precarious work practices got Europe into this crisis, and finance ministers are totally wrong to think that they will get us out of it.

According to John Monks, general secretary of the ETUC: “Finance ministers and DG ECFIN must stop forcing member states to weaken collective bargaining systems as is happening in Ireland. Instead, they should urgently focus on how to prevent financial markets from bringing down one member state after the other”.

PES Position: Commission Annual Growth Survey a ‘frontal assault on workers’

Despite the crisis that has engulfed the Eurozone, and the massive job losses that have resulted, the European Commission has seen fit to publish a document which directly attacks workers rights, unemployment benefits and in broad terms, the already much weakened Social Model in Europe.

The document, entitled the Annual Growth Survey, was adopted by the Commission on 11 January under heavy pressure from Commission President Jose Manuel Barroso and will also be presented at the European Council meeting on 4 February. Although not a legislative test, the Survey gives a clear indication of the road map that the Commission wishes to take.

The Commission demands that Member States:

• strengthen indirect taxation, while weakening the progressive structure of taxes;
• incentivise longer working hours;
• increase the retirement age and further privatise pension schemes;
• weaken employment protection legislation;
• reduce direct unemployment benefits;
• And to further liberalise the public sector.

PES President Poul Nyrup Rasmussen, stated that; “the document illustrates that Mr. Barroso has not learned the lessons of 2010, nor acknowledged of the inherent weaknesses of the neo-liberal model that caused the economic crisis. Instead it outlines his delusional belief that the road to economic recovery is based on more harsh measures for those already suffering most from the effects of recession”.

Speaking in the European Parliament on 19 January, Socialist MEP Stephen Hughes (UK) stated that; “The first Annual Growth Survey is a frontal assault against long established and both socially and economically essential workers' rights, and against the very concept of collective bargaining”. He went on to say that the text, if validated by the European Council; “is the worst I can think of in the current context. It will not only reveal its economic fallacy, but it will profoundly damage the European project”.

The European Trade Union Confederation (ETUC) has also roundly condemned the text. In a very strongly worded letter to the Commission President Jose Manuel Barroso, the ETUC Secretary General, John Monks, called the text ; “an attack on Social Europe and is in marked contrast to the relaxed, non-interfering view on rapidly increasing levels of top pay, including bank bonuses”.

The PES has committed to highlighting the dangers of the text among its European and national networks. At the PES Council in December, a more socially balanced alternative was adopted, under the banner of “the European Employment and Social Progress Pact”.