The ETUC ‘State of the European Union’ speech

Use the Semester process to recommend Member States to push for wage increases everywhere in Europe. ….This can be achieved through a mix of measures: strengthening collective bargaining where it exists, re-establishing it where it has been dismantled, creating it where it doesn’t exist via national legal frameworks in support of social partners, including capacity building

The Pillar should be accompanied by an ‘Action Plan’ for implementation, to be issued after the proclamation. The package promoting a better work-life balance and gender equality, and an ambitious revision of the Posting of Workers Directive, have to be delivered by the end of the year.

Most EU countries simply refuse to take in their fair share of these desperate people, and refuse even to accept the refugees they agreed to accept. It’s a humanitarian crisis simply kept out of sight ….. This is not the European Commission’s fault, it is the member states’. But it does not make it any less shameful.

Speech by Luca Visentini, ETUC General Secretary 

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Ten years ago, the slide into crisis had started.
Because of that crisis, many Europeans have suffered 10 miserable years.
10 years when the greed of a deregulated financial sector turned into a crisis of government debt – leading to a decade of austerity and cuts, and a decade of attacks on working people’s wages and trade union collective bargaining.
Those countries that had the misfortune to need the aid of the EU/IMF financial support programme suffered the worst.
The EU’s Stability and Growth Pact and the straight jacket of austerity prevented countries from investing in growth to avoid recession. A crisis caused by neo-liberalism was treated with more neo-liberalism: it almost killed the patients.
It is no surprise that austerity led to political crisis: with a collapse in support for mainstream political parties in many European countries, and the rise of populist, extremist movements.
The parties that claimed to represent working people, but embraced deregulation and austerity, have lost the most votes.
The European Union itself has suffered a huge backlash. With the Brexit vote and the refusal of EU governments to work together to manage the influx of refugees, the EU seemed to be at risk of falling apart.

Last year, in his state of the union speech, President Juncker said that the EU faced an existential crisis.
And we recognise that after that speech Mr Juncker and the Commission have been consistent in pushing for a better future for Europe, and for social Europe to be recovered and relaunched.
The discussion which preceded and followed the publication of the White Paper by the Commission and the adoption of the Rome’s Declaration by Member States was meaningful, and social partners – notably trade unions – have actively participated in it.
Now we enter the most crucial period before the current EU legislative term ends: either most relevant initiatives for a different economic governance, for social Europe and for more integration are delivered now, or we all will face the biggest failure of the European project ever.

Where are we now? What is the current state of the union? What will President Juncker be telling the European Parliament tomorrow? I don’t want to speculate on what Mr Juncker will say, but I want instead to give an ETUC perspective.
We hope we are over the worst of the economic crisis. There are some hopeful although contradictory signs.
EU economic forecasts predict low slow growth – under 2% this year and next.
Employment across the EU stands at 71%.
Unemployment is below 8% in the EU, down from a high of 11%; and in the eurozone just over 9% from a high of over 12%.

Nevertheless, social conditions remain very worrying.
Unemployment is still far too high. Over 10% in five EU member states – 21% in Greece and 17% in Spain.
Over 18 million unemployed men and women across the EU is a tragedy, and an economic waste.
Almost half of all young people in Greece, four out of 10 in Spain, and over a third in Italy are unable to find work. It’s not acceptable.
Employment is up but many new jobs are precarious: temporary or part-time. Almost one in five jobs are part-time, over 14% are fixed-term. More than a quarter of jobs in Poland and Spain are fixed-term.
Almost one fourth of the EU labour market is made of non-standard and self-employment jobs, which don’t enjoy a fair remuneration and equal rights with normal employees.
It is really high time for the European Union to push for quality jobs.
Eurostat recently reported on progress towards the EU’s 2020 targets – adopted in 2010 as part of an agenda for jobs and growth. They included cutting the number of people at risk of poverty by 20 million.
Rising inequalities, wage divide and labour market fragmentation have dramatically increased in the EU, and there are no signs of reversal despite the timid economic and employment growth we are facing.
Today, over seven years into the 2010-2020 decade, the latest available figures indicate that more people are at risk of poverty or social exclusion than in 2010. Instead of progress towards this target, Europe has gone backwards.

Another cruel fact: wage convergence between eastern and western countries in the EU has stopped since 2008. The east-west wage gap has got bigger.
After years of steady progress since the 1990s, by 2008, wages of workers in Poland reached one third of those in Germany. It was bad, but things were getting better. By 2015 the rate had fallen to less than 30%.
In Bulgaria, the wage gap is still closing. But a worker in Bulgaria earns less than one fifth of what a worker in Germany gets.
Slovakian and Czech workers are only little less productive as German workers, and the cost of living for them is the same of that in Germany – but their wages, including in German companies’ plant in their countries, are dramatically smaller than the German ones.
Our Czech affiliates have calculated that, with the current speed in wage increases in the country, it will decades to catch up with Western countries.

So, I am very reluctant to talk about ‘recovery’.
It is too soon to say that the crisis is over. Austerity is not dead, and the upward social convergence we want – and that President Juncker has announced – is still far from happening.
In the political arena, we are happy to see that far-right challengers have been defeated in elections in Austria, the Netherlands and France.
But progressive forces have almost disappeared in some of these countries, and we are not at all confident they can succeed in the oncoming federal elections in Germany and Austria.
On Brexit, it is the British Government that is in unprepared and disunited, not the EU27.
But this imbalanced situation doesn’t promise anything good for workers and social rights, particularly in the UK and Ireland.

As I said, the Commission and the most forward-looking Governments are becoming aware of this challenging scenario, and they at least launched a discussion about the future of Europe, together with some first measures to take some action on it.
After having published the White Paper, the European Commission has produced a series of reflection papers on the future of the EU. Some of the analysis and scenarios presented are positive, and we look forward to the discussion in the Council in December this year.
On the 60th anniversary of the treaty of Rome, national governments pledged to work towards a social Europe that promotes economic and social progress – and now they will follow up with a Social Summit in Gothenburg mid-November, where we ask the European Pillar of Social Rights to be proclaimed and social partners to be involved to design a more ambitious and effective social Europe.
These developments took place also because of the push from trade unions.
We want to make clear today that we are not only ready to actively participate in all these processes: but that we have produced our own Roadmap for the future of Europe, which contains a very ambitious set of proposals, and we bring these to the attention of all institutions and stakeholders.
We want to make clear that we expect the European Commission and Parliament, as well as Governments, not to lose the momentum, and to deliver concrete legislation and action.
European workers and citizens are waiting for this, and they deserve it. Without this, Europe won’t have a future.

At our Mid-Term Conference, on 29-31 May in Rome, we set out our priorities.
Now it’s time to make our narrative and proposals heard, to act to bring concrete results to workers.
Let me emphasise the key demands of the ETUC.
We would like to see them reflected in President Juncker’s speech tomorrow, in the Work Programme 2018 of the European Commission to be published in few days, and in the roadmaps for decisions and initiatives to be delivered by Parliament and Council before the European elections.

Let’s begin from the reflection on the Future of Europe.
We expect the Council to discuss the Commission’s proposals in December.
The ETUC is clearly in favour of the scenario which leads to the maximum level possible of EU integration.
The ETUC hopes that there will be the conditions for targeted Treaty changes, to achieve more integration and democratic accountability of EU institutions, and reinforcing them to reverse the re-nationalisation of the EU decision-making processes.
If Treaty changes take place, we ask all institutions to emphasise the employment and social dimension, by including a Social Progress Protocol to make sure that labour rights have the same level of importance as economic freedoms.

This implies institutional reforms, including of the economic governance of the EU, where the social dimension has a key role to play.
We want to come back, of course with an innovative spirit, to the social market economy and to the European social model, that Jacques Delors designed more than 20 years ago – and that have been since then repeatedly attacked and undermined.
Reinforcing the role of the Commission and the democratic control of the Parliament is essential, together with an economic governance which is democratic and legitimate.
We are really fed up with institutions like the Eurogroup, the Troika, the ESM, that out of any control have destroyed people’s and workers’ lives.
It’s high time for Commission and Parliament to take the lead and ownership of the EU economic and social policy.
We would welcome a Commissioner in charge of economic and financial affairs who chairs both ECOFIN and Eurogroup, and stronger cooperation between financial and labour ministers – but even more we want the Semester to become an Economic AND SOCIAL Semester.
We know there are many, in the Commission and in the Parliament, including President Juncker, who share these views – it’s time to really go for it, and it can be done without any Treaty change.

Our first priority is public investment for quality job creation.
The Juncker Plan has achieved important results. Nevertheless, it’s not enough to give all Member States fiscal space for public investment to relaunch a job-rich economic growth.
To this purpose, the ETUC has issued its proposals.
A reform of the Stability and Growth Pact, to stabilise and reinforce the levels of flexibility the Commission has already allowed on deficit and debt targets.
And the creation of a European Treasury, to allow MS to invest, including the ones with no fiscal space – a proposal that doesn’t imply fiscal transfer nor mutualisation of existing public debt.
We know there is a debate on whether to establish a Treasury or a European Monetary Fund: we are not in love with structures, but want to make clear that it must not be another intergovernmental tool: the EU  needs a financial arm based on solidarity and a communitarian approach.

Second come wages.
Workers in Europe are facing a wage emergency. Wages dropped or even collapsed in the West, particularly Southern Europe, and in the East-West wage gap is increasing instead of reducing, and so increasing inequality.
That’s why the ETUC has launched a Pay Rise Campaign, to combat wage dumping, sustain internal demand productivity and competitiveness, address inequalities, and reduce unacceptable wage gaps which are undermining the potential of Single Market.
We know perfectly well that wages are not an EU competence and we want to protect the autonomy of social partners in setting wages.
But at the same time, we cannot forget that during the crisis wage cuts and collective bargaining dismantling originated from recommendations of the Commission and Troika.
We therefore ask the Commission now  to go in the opposite direction, and to use the Semester process to recommend Member States to push for wage increases everywhere in Europe.
A pay rise must take place in surplus countries to support internal demand and productivity, but also in the other countries to address the wage divide through upward convergence.
This can be achieved through a mix of measures.
Strengthening collective bargaining where it exists, re-establishing it where it has been dismantled, creating it where it doesn’t exist via national legal frameworks in support of social partners, including capacity building.
Enlarging collective bargaining coverage at all levels, including for non-standard work.
Reinforcing minimum wage systems where they exist, and setting targets for increasing minimum wages, as the ETUC proposal to at least  60% of the median or average in each country.
Supporting upward wage convergence, particularly within multinational companies and supply chains.
Closing gender pay gaps, fighting unjustified discriminatory minimum wages for young workers, and addressing all other unfair wage discrimination.
We expect all these elements to be at the core of the next Annual Growth Survey and Country Specific Recommendations for 2018.

Then more generally comes the focus on Social Europe.
The ETUC supports the initiatives for a ‘triple-A’ Social Europe, and notably a strong European Pillar of Social Rights which makes life better for workers.
At the same time, we want all this to be delivered in practice and soon.
Therefore, we ask institutions for a fast proclamation of the EPSR, on the occasion of the Gothenburg Summit, by pushing governments for implementation in practice and for strong involvement of social partners at all levels.
The Pillar should be accompanied by an ‘Action Plan’ for implementation, to be issued after the proclamation. The ‘Action Plan’ should include concrete actions for enforcing each of the 20 principles, and for enforcing existing rights and legal instruments in the framework of the EU ‘social acquis’, via all available legislative and non-legislative tools at EU and national level.
EU funds and the new MFF must be mobilised, to make all rights and measures included in the Pillar concretely enforceable.
The package promoting a better work-life balance and gender equality, and an ambitious revision of the Posting of Workers Directive, have to be delivered by the end of the year.
And so the legislative initiatives on the Written Statement and Social Protection must be delivered, to enlarge the floor of rights, guarantee non-regression and better enforcement of existing rights, improve working conditions, and ensure adequate remuneration and full access to social protection to all categories of workers (including non-standard and self-employed).
The ETUC is providing inputs to the Commission and strongly lobbying Member States to make sure that these objectives are achieved.
Despite the difficulties that social dialogue is facing in the current circumstances, the ETUC is committed to keeping it alive and effective.
In the letter sent to the employers’ organisations on 28 July, the ETUC refused any delay in the process of consultation regarding Written Statement Directive and Social Protection, and reaffirmed our availability for meaningful dialogue on those initiatives and on the social partners’ work programme, while asking the Commission to deliver its proposals for Directives and Recommendations for both initiatives by the end of the year.
Furthermore, the ETUC asks the Commission to ensure paths for transposition, implementation and enforcement of the sectoral social partners’ autonomous agreements, like the ones in the fields of Hairdressing and Central Government Administrations.

What happens in the fields of climate, digitalisation, globalisation, trade, and in the new frontiers of the labour market, requires all of us to take responsibility and to put in place a more innovative and forward-looking approach, based on fairness, solidarity, and active change-management.
European and national institutions must protect workers’ interests and rights, to make sure that no one is left behind, that for each job lost more than one job (a quality job) is created, and that the necessary public funding and institutional governance is available, particularly at sectoral and local level.
We thank the European Parliament for supporting the ETUC proposal for a Just Transition Fund to manage climate policy impacts on the economy and jobs. We ask now the European Commission to set up the fund, to include the concept of ‘just transition’ in any reflection on globalisation, and to follow the same ‘just’ logic in proposing new ways to fund labour transition measures for European workers affected by digitalisation and automation.
We have launched an ETUC initiative for a progressive and fair trade agenda, to be negotiated with the European Commission and all other trade union partners and institutional interlocutors over the world, to make sure that labour, social and environmental sustainability goes always together with free trade.
These epochal developments require a dialogue-based attitude, not to merely compensate negative consequences, but to prevent them while building up a better future for all.

Finally, I would like to touch upon the situation of refugees and migrants.
After the agreement with Turkey, which we condemned, now Europe is going to pay also the barely-existing Libyan Government to keep refugees and migrants away from our borders. Thousands of them are stuck in Greece, in Italy and the Balkans, or are blocked in inhuman conditions in camps and prisons in North Africa, where they suffer violence, persecution and death.
Most EU countries simply refuse to take in their fair share of these desperate people, and refuse even to accept the refugees they agreed to accept. It’s a humanitarian crisis simply kept out of sight, to please voters instead of building a positive narrative on the contribution and potential that migrants bring to the European economy, labour market and society.
This is not the European Commission’s fault, it is the member states’. But it does not make it any less shameful.
In the meantime, the possibility of reforming the EU Asylum System is nil. Despite the announcement of the Prime Ministers of France, Germany, Italy and Spain who recently met in Paris, the Commission knows that little room for manoeuvre exists in the Council to reform the Dublin Regulations. The ETUC would consider it a huge mistake to abandon the legislative proposals submitted more than one year ago for a genuine EU Asylum Policy.
NGOs, trade unions, and even the United Nations, are denouncing the European Union for not having a policy for migration and for breaking international rules and conventions, but nothing happens.
Be sure we will never give up in denouncing this scandalous situation, and will continue to call on the Commission and Government to take responsibility.

‘A European Union that protects’, Mr Juncker said in his first speech in front of the European Parliament as President of the Commission. We couldn’t agree more.
Now it’s really time to make it real. The clock is ticking towards the end of his mandate and results must be delivered urgently.
As European trade unions representing 45 million workers around the EU, we know what people need.
And we want to be proud, not ashamed, of Europe.
We are always ready to cooperate for the better, and we want to see a change.

Thank you very much.