Brussels, 16/01/2012 (Agence Europe) - The steps that have already been taken and those currently envisaged to stabilise the eurozone could put a sizeable brake on economic growth, leading possibly to further budgetary problems and putting employment within the EU at considerable risk. This is a view, which considers the analysis and the solutions to the crisis to be flawed - a view that is shared by both the European Trade Union Confederation (ETUC) and the Standard and Poor's credit rating agency.
These two most unlikely bedfellows remain unconvinced about the plans set out at the European summit of 9 December and do not believe the statements from French President Nicolas Sarkozy and German Chancellor Angela Merkel that the priority is getting economic growth going again (see EUROPE 10527). Justifying the downgrading of the long-term ratings of nine eurozone states on Friday 13 January, the American ratings agency clearly criticised European players for proposing policy initiatives which “may be insufficient to fully address ongoing systemic stresses in the eurozone”. Even worse: not only may these measures be insufficient, they threaten to worsen the economic situation of the eurozone and have a knock-on effect on the rest of the EU. “We believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers' rising concerns about job security and disposable incomes, eroding national tax revenues”, said Standard and Poor's in a press release on Friday 13 January.
The ETUC adopts a similar line of argument and the same concerns, deeming that “fiscal discipline alone, in the absence of recovery and investment measures, is dragging countries into crisis”. The main risk today is that the measures being promoted offer “no long-term prospects for restoring employment and sustainable growth”, in the words of ETUC Secretary General Bernadette Ségol, speaking on Thursday 12 January. The unions want to be consulted in negotiations taking place so that a social protocol to protect workers can be inserted in the agreement. The new treaty “reinforces policies that do not work”. “The approach cannot be based solely on management principles and accounts. The latest employment figures from Eurostat (see EUROPE 10528) are damning”, Ségol argues.
The European Commission says that the analysis by Standard and Poor's on the situation and prospects for the eurozone are flawed. Economic growth and employment are, indeed, central to European recovery policy. The importance given to the EUROPE 2020 strategy, a genuine lever for growth, bears witness to this, said Commission spokesman Olivier Bailly on Monday 16 January. (JK/transl.rt)