The strange death of social Europe

Brian Denny exposes the reality behind the empty promises of ‘social Europe’ and how EU rules are creating an anti-social Europe

The EU is imposing zero-hours contracts, the end of collective bargaining, casualisation and poverty pay across Europe as a part of its structural adjustment programme known as austerity.

Even the European TUC, which recently campaigned for a ‘Yes ‘vote in the Greek referendum for more austerity, openly admits that “cuts in salaries, cuts in public services and weakening collective bargaining rights are all on the agenda”.

So what happened to ‘social Europe’ repeated ad nauseam to sell the European project to the labour movement for nearly 30 years?

Jacques Delors evangelised for ‘Social Europe’ when he became president of the European Commission in 1985. He made an infamous speech at the 1988 TUC, claiming that the completion of the Single European Market would deliver a social model compatible to trade union aspirations in Britain. Trade union leaders largely accepted this untested and unfounded mantra, not least because this period was marked by the historical defeat of organised labour.

Yet under the model proposed by Delors the post-war Keynesian economic model focussed on full employment and stimulating demand was gradually replaced with one which prioritised price stability over jobs and focused on wage moderation and labour market ‘reform’ as the main route to maintain competiveness ie Thatcherite neo-liberalism.

In some cases, such as in Italy, Ireland and in Germany, corporatist arrangements of ‘social partnership’ were pursued. In other cases, most notably Britain, change came via direct confrontation between organised labour and the state. Yet, common to all was the use made of ‘Europe’ as the route via which the social bonds and obligations of the Keynesian ‘Golden Age’ were abandoned.

Privatisation policies and the liberalisation of financial markets across Europe all came about as a result of decisions by national governments. These Thatcherite policies were then subsequently enshrined into the 1986 EU treaty known as the Single European Act (SEA). This treaty –which gave birth to the Single European Market (SEM) and the Single Currency – was drawn up by Thatcher’s Tory henchmen including the young researcher John Bercow now Speaker of the House of Commons.

He was later to write: “Margaret Thatcher was herself a driving force behind the Act and some of her ministers positively fizzed with enthusiasm about the Single Market which they believed achieved the Thatcherisation of Europe”.

The SEA entered into force on July 1 1987 and was designed to establish an area demanding the free movement of goods, services, labour, and capital.

It sought nothing less than to set up a single economic, political and legal area within the EU. It also introduced qualified majority voting in the Council of Ministers in many policy areas, stripping member states of independent veto rights.

As Margaret Thatcher herself put it: “we wished to have many directives under majority voting because things which we wanted were being stopped by others using a single vote”.

Since then, the areas covered by qualified majority voting have been massively extended by stealth, stripping countries of much of the powers associated with independent nation states.

Jacques Delors, the supposed workers’ friend, also promoted Economic and Monetary Union (EMU) and the single currency as a key element in this integration process.

To sweeten this neo-liberal pill, he proposed a largely symbolic Social Charter to ensure support for the entire project from trade union bureaucracies across Europe, particularly in Denmark and the UK. He claimed that the EU was the alternative to mass unemployment and endless Tory attacks on the working class.

In exchange for signing up to the entire eurofederalist project, Delors offered British trade unions a sympathetic ear in Brussels and a share in the supposed economic benefits of the EU and large parts of the labour movement fell for this particular con trick.

In fact plans for a single European market written into the 1987 treaty were drawn up by the European Round Table of Industrialists (ERT) made up of representatives from around 50 companies including DaimlerChrysler, Fiat, Nestle, Renault and Siemens as well as UK firms like BP, Rio Tinto and Rolls Royce. It has a clear remit to promote further EU integration to benefit European-based transnational corporations.

ERT boss Keith Richardson went along with the ‘social Europe’ charade at the time: “If politicians feel it is important to get the chapter referring to the desirability of full employment and they think it will help public opinion, we don’t really object – providing of course that it remains related to aspirations,” he said.

Obviously the alleged benefits of ‘social Europe’ have failed to materialise as over one million British manufacturing jobs have disappeared since 1997 alone. In Germany, the number of jobless has passed five million and French employment has ballooned. Greek unemployment has reached catastrophic levels and the country faces a future of permanent austerity and little or no workers’ rights.

In recent years there has also been an explosion in the use of agency workers and zero-hour contracts here in Britain and across the European Union.

It has been estimated that over a million people in Britain are now on zero-hour contracts which allows employers to use and abuse workers without any obligation to guarantee a minimum number of working hours.

But zero-hours contracts and the increasing use of agency workers simply reflects the EU’s neoliberal employment model which promotes labour market “flexibility,” while allegedly providing minimum protections to soften the blow, so-called “flexicurity” – the made-up word by which this model is sold.

This agenda openly calls for wages to reflect productivity, which means cutting wages even further allegedly to compete with the “core” high-investment economies of France and Germany.

This has sparked unprecedented levels of unemployment particularly in so-called “peripheral” countries such as Ireland, Greece, Portugal and the Baltic states.

The wholesale suspension of trade union collective bargaining as a condition of EU “bailouts” in Ireland, Portugal and Greece also demonstrates that trade union rights are an obstacle to EU plans for restructuring labour markets.

The European Commission, IMF and the European Central Bank now directly intervene in national wage negotiations in Ireland, Greece and Romania to weaken collective bargaining. For instance previously in Romania 98 per cent of workers were covered by collective agreements today that figure is around 20 per cent.

So why haven’t the much-lauded European Union Agency Work Regulations (AWR) defended vulnerable workers?

The overwhelming effect of AWR coming into force has been to actually normalise and institutionalise casualised labour.

Moreover while the regulations are meant to ensure agency workers enjoy the same basic pay and conditions as permanent workers any such rights only kick after 12 weeks on the same temporary assignment.

And as if that is not enough there is a “flat-pack” solution for employers to avoid the AWR altogether, the so-called “Swedish derogation” which is being used aggressively by agencies and users of agency work to keep down pay.

TUC general secretary Frances O’Grady has said: “Swedish derogation contracts are just one more example of a new growing type of employment that offers no job security, poor career progression and often low pay.”

The EU directive even demands that member states end “unjustified” or “disproportionate” restrictions on agency work such as the ban on agency workers in the public sector in France and Spain.

The ineffectual nature of the so-called social Europe agenda is underlined by the fact much of this legislation is ‘soft law’ ie there is little policing of such policies. For instance no member state has ever be prosecuted by the European Commission for not implementing the Working Time Directive.

A number of rulings by the European Court of Justice also highlight just how the internal market batters down minimum trade union standards won at a national level.

Moreover EU rules demanding the complete free movement of labour have had a profound impact on all trade unions operating within the EU.

Following the accession of eastern European states to the EU, migrant labour has been rapidly moving west while capital and manufacturing jobs are moving east.

While western European countries experiencing a large influx of migrant labour, eastern European states are suffering population falls and an inevitable brain drain, leading to a loss of skilled labour and young people as well as an uncertain future of underdevelopment.

In more developed member states, wages have been under pressure in many sectors in a process known as ‘social dumping’, as cheap foreign labour replaces the indigenous workforce and trade union bargaining power is severely weakened.

Even the pro-EU Irish Congress of Trade Unions is demanding measures to protect particularly unskilled workers where social dumping is threatening jobs.

“It is an iron law of economics that an abundant supply of labour pushes down its cost. It is insulting people’s intelligence to pretend otherwise,” it said in a statement.

The promises of “social Europe,” launched 30 years ago are being replaced by the realities of “anti-social Europe” with attacks on workers’ rights across Europe driven by the EU institutions.

Ultimately, destroying the concept of a permanent job with rights and replacing it with precarious employment while exploiting a reserve army of cheap labour is the core structural adjustment strategy of the EU.

That is no future for workers or the labour movement. Vote against anti-social Europe, vote to get out.