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22 April 2016

Benchmarking 2016: only a faint flicker of light at the end of the tunnel

Despite several encouraging signs, the social and economic situation in the European Union remains unstable. With no sign of a change of course in the austerity policies that have been pursued over the past few years, there is little cause for optimism. These at least were the main conclusions drawn from the presentation of the Benchmarking Working Europe 2016 report, held in Brussels on 19 April.

“Despite signs that the recession is over, recovery does not appear powerful enough to help heal the scars of the crisis,” stated Sotiria Theodoropoulou.

The senior researcher at the ETUI co-authored the publication’s chapter dedicated to recent macroeconomic developments. Several indicators show that the economic situation in Europe is still very fragile. Theodoropoulou pointed to the weak growth seen in Austria, Germany and the Netherlands as being particularly remarkable because these are the core Eurozone countries that did not face sovereign debt crises.

The researcher considers that a return to growth will be achieved through an increase in internal demand in the Euro area as a whole, which has remained far too weak in the last few years. Also necessary will be a more active fiscal policy approach, in particular through an increase in public investment and the development of policies to reduce income inequality.

The issue of social inequality was also raised by Torsten Müller, who co-authored the chapter on wages and collective bargaining. The senior ETUI researcher explained that the reduction in the gender pay gap that developed during the crisis in a majority of EU countries was actually the result of a decline in male earnings – particularly in the construction sector – rather than an improvement in female pay. On a related issue, the freeze on minimum wages has had a very harmful impact on women, who are over-represented at the lower levels of the pay scale. Despite the raising of the minimum wage in several countries over the period 2014-2015, it has remained below the poverty threshold in ten Member States. Furthermore, the situation has also not been helped, but rather exacerbated, by the decentralisation of collective bargaining.

Müller voiced support for an increase in real wages in order to boost demand, but noted the unfortunate absence of any political resolution to follow this course.

Invited to comment on the data findings of Benchmarking 2016, Gilberto Pelosi, representative of Social Platform - the largest European NGOs platform working in the social sector - voiced an urgent call for redistribution policies to be put into action in order to reduce social inequality. “The viability of the European project itself is at stake here,” he declared, inviting the Commission to match words with actions.

Peter Scherrer, deputy general secretary of the European Trade Union Confederation, also called for the Commission to change course. “A fundamental policy change is necessary,” he urged. In his opinion, there must be an end to austerity measures. Instead, it is imperative that public authorities launch ambitious investment programmes, particularly in the areas of infrastructure and public services. Scherrer emphasised that the consultation and participation of workers needs to remain the essential benchmark in socio-economic life, especially at a moment when new forms of working relations are emerging, with the advent of the digital economy.

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