BRIAN DENNY looks at how the European Commission has waged war on trade unions and kept wages down for working people across its member states
THE EU is not defending workers’ rights as the Remainiacs never cease to claim.
In fact the EU is directly behind the huge assault on wages, pensions, collective bargaining and other workers’ rights across the EU, including the current battle going on in France.
Moreover it is being done in contravention of its own treaties in a typically bureaucratic and Byzantine way.
Officially, the Treaty on the Functioning of the European Union (TFEU, Article 153.5), explicitly states that the EU has no competences in the area of wage policy.
Yet this has not prevented EU institutions such as the European Commission, the European Central Bank (ECB) or even the European Council from demanding wage “moderation” across the EU.
The Broad Economic Policy Guidelines (BEPG), regularly produced by the Commission since 1993, always included demands for wage “moderation.”
However a new system of European economic governance began to emerge in 2010 with the adoption of the controversial, neoliberal Europe 2020 strategy, which included a yearly cycle of EU economic policy co-ordination.
This explicitly includes wage policy which is considered the most important adjustment variable for promoting “competitiveness.”
The legal basis for this new form of “authoritarian neoliberalism” as it has been called comprises above all the Euro Plus Pact adopted on the initiative of Angela Merkel and Nicolas Sarkozy in March 2011.
As a result, while EU competence over wage policy is still expressly forbidden, with the Euro Plus Pact wage policy intervention at EU level is now mystically allowed.
Now the EU issues annual policy recommendations for all member states which must then be transformed into national “reform programmes” whose effectiveness will again be assessed by the EU.
The annual economic co-ordination cycle was further developed in 2011 with the adoption of a package of five Regulations and one Directive.
The so-called “six-pack” contains two new major instruments in order to intensify economic policy co-ordination: one is the establishment of a new system of surveillance and the second is the introduction of fines on those countries that fail to comply.
The 2013 Treaty for Stability, Co-ordination and Governance (TSCG) further reinforced mechanisms to enable the EU to “co-ordinate and monitor the economic and budgetary policies of the member states.”
Each February the Commission publishes detailed reports on each country and their “progress.” This year’s report pointed out an “excessive” imbalance — too much public expenditure and a lack of competitiveness.
However, it recorded “substantial progress in the matter of reducing the cost of labour and retirement pension reform.”
On April 13, the French government adopted its EU National Programme of Reform (NPR) and acquiesced to EU demands for “giving more latitude to companies, to adapt wages and working hours to their economic situation” — ie huge changes to French employment law.
It is this that French workers are fighting against.
The scope for EU attacks on wages and collective bargaining expanded most rapidly in those crisis-hit countries which rely on “bailouts” from the EU and/or the International Monetary Fund (IMF).
In exchange for bailouts, these countries had to introduce “reforms” laid down either in so-called memorandums of understanding with the Troika of EU, European Central Bank (ECB) and IMF in the case of Greece, Ireland and Portugal, or in “stand-by arrangements” with the IMF, in the case of Hungary, Latvia and Romania.
These policy measures comprised attacks on wages, social services and public ownership and far-reaching labour market “reforms” including the abolition of systems of collective bargaining.
There is a simple reason for this — where there is no collective bargaining there is a decline in wages.
For the hard-line German member of the ECB Executive Board Joerg Asmussen, labour market “reforms” such as removing collective rights are even “the key if a country wishes to remain within the euro.”
As a result attacks on workers at national level are being driven by a new EU interventionism in an unprecedented way.
For example prior to the 2008 crisis, Romania had a legal system that supported dialogue between trade unions, employers and the government, resulting in widespread collective bargaining at all levels.
By 2011, at the behest of the EU, the government had scrapped all collective agreements and changed, without parliamentary debate, the main labour laws, making it impossible to have cross-sectoral collective agreements.
The recession was thus exploited by the EU and a compliant government in Bucharest as a pretext to rip the guts out of the existing industrial relations system and lower labour costs.
Even the EU-funded European Trade Union Confederation general secretary Bernadette Segol identified two fronts where collective bargaining is coming under attack: the decentralisation of bargaining and allowing employers to ignore trade union bodies in favour of non-union bodies.
Addressing the theme of Social Europe, she points out that “policies that are being implemented are attacking industrial relations systems, putting pressure on wages, weakening public services and weakening social protection.
“These are the core aspects of the social model,” confirming the view of many observers that the model is now dead — if indeed it was ever alive at all.
Brian Denny is a spokesman for Trade Unionists Against the EU.