Nearly five years into the Europe 2020 strategy, the EU’s focus on austerity and deregulation is failing to deliver. Growth remains fragile, unemployment has surged to record heights, poverty has risen to unacceptable levels, inequality has grown, social rights are being undermined and the EU has lost its global leadership in the transition to a low-carbon economy.
These are some of the conclusions of the Benchmarking Working Europe 2014 report published by the ETUC and the ETUI on 24 March. Raising the question whether Europe is “half-way through a lost decade”, the annual stock-taking exercise provides a diagnosis of the EU’s crisis management policies over the last five years.
The publication looks at the most important statistics in eight key areas of working Europe: the EU’s macroeconomic situation, labour market developments, inequality and poverty, deregulation of labour law, wages and collective bargaining, health and safety at work, worker participation rights and the impact of austerity on the green agenda.
These are some of the main findings of the report:
- The policies of internal devaluation have not achieved the expected results. While having failed to promote a recovery of export-led growth, these policies have contributed to a collapse of domestic demand. They have exacerbated the crisis and prolonged the recession. A narrow vision of competitiveness based on lowering wages has led to underestimating the importance of investment, innovation and modernisation. (chapter 1)
- The crisis has taken its toll on labour markets with unemployment surging by 10 million people (to 26.1 million in 2013) and employment rates (one of the targets of Europe 2020: 75% for the 20-64 age group) falling to 68%. There has also been a shift from full-time jobs to part-time. (chapter 2)
- Contrary to the Europe 2020 target of lifting 20 million people out of poverty, the number of people at risk of getting into poverty has increased by 13 million over the last five years. Furthermore, in-work poverty has risen: the risk of poverty among people who are employed had risen by relatively more than the risk among the unemployed since the crisis started. (chapter 3)
- Deregulatory labour law reforms have been introduced through the CSRs (country-specific recommendations) for most Member States and the MoUs (Memorandums of Understanding) for the bail-out countries. An increasing number of international and European human and social rights bodies like the ILO and the European Court of Human Rights as well as national constitutional courts have condemned some of the austerity measures as being in breach of international, European and national fundamental rights. That is why in several countries trade unions have started litigation actions against this deregulation of labour law. (chapter 4)
- There has been increasing political intervention in national collective bargaining resulting in downward pressure on wages and decentralisation of collective bargaining. This suppressed internal demand, fostered deflationary tendencies, and thereby cemented economic stagnation in Europe. (chapter 5).
- At a time when health and safety conditions at the work place have come under pressure through increased work insecurity and psychosocial risks, the EU’s resolve for strong policies in this area has diminished and the political impulse for OSH has been placed on hold. (chapter 6)
- The crisis-induced changes in labour law and collective bargaining systems have weakened employee representation and the Fitness Check and the REFIT process threaten to undermine employees’ rights to information and consultation, particularly in smaller companies. (chapter 7)
- The economic and financial crisis has derailed the EU’s low-carbon transition strategy. Although Europe is on track to reach the 20% greenhouse emissions reduction target, that is mainly due to the effects of the recession on output. There has been a collapse of European investment in renewables and Europe is lagging seriously behind its own EU2020 targets in improvements in energy efficiency. Last but not least, fuel poverty is growing in Europe. (chapter 8)
The findings in the Benchmarking Working Europe 2014 report point to policy failures and to the need to redefine alternatives in order to get Europe back to a sustainable growth path that will lead to an upward harmonisation of standards and outcomes.
As stated by ETUC General Secretary Bernadette Ségol and ETUI directors Maria Jepsen and Philippe Pochet in the foreword to the report: “The current trend towards ever greater economic as well as social divergence across the European Union cannot form a viable basis for the future of European integration. The conclusions of the mid-term review [of the Europe 2020 strategy] should take the above-mentioned highly alarming trends seriously into account and should reassess the direction of EU policy to include a fully-fledged investment strategy for the future, a halt to the deregulatory process, a consolidation of social protection and commitment to a Europe characterised by high social standards including in the field of health and safety”.