Brussels, 08/04/2013 (Agence Europe) - On Monday 8 April, the International Labour Organisation said that the strategy adopted within the EU to tackle the economic crisis had “failed”. With unemployment constantly rising and employment levels far above their pre-crisis level, the ILO claims that the EU now has to change from an austerity strategy characterised by budget tightening and “internal devaluations” to an approach that promotes job creation. This does not necessarily mean that it has to forego public debt reduction but the ILO argues that this should be done in a more realistic and less hard-line way.
In the section devoted to Europe, the most recent “Jobs, Growth and Social Justice” report is based on a simple cause and effect principle. If all economic indicators are currently in the red, this means that austerity and structural reforms carried out by EU member states have been “ill-conceived”. This report, presented on the sidelines of the European Regional ILO meeting on 8-11 April in Oslo, Norway, which brought together tripartite representatives from 51 countries in the region, together with commissioners Olli Rehn (economy) and Laszlo Andor (employment), called for the EU to change its tactics in order for it to be able to tackle the damaging recession.
The ILO's report comes at the same time as several member states are attempting to obtain more time in which to reach their budget targets. The ILO appears to support this because it thinks that there is room for a smoother budgetary trajectory that would enable them to achieve their employment and health budget objectives. The underlying reasoning is that current austerity policies have killed off domestic demand, which is not being compensated for by exports because these have also been eroding within the EU.
There are four ILO proposals: 1) address the structural weaknesses that lie behind the crisis in the financial sector, which are still preventing provision of appropriate funding to SMEs; (2) stopping restricting the EU strategy to budgetary austerity and “internal devaluations” intended to improve competitiveness through low wages; (3) adopting emergency measures, such as the youth guarantee mechanism and improved coordination of euro zone employment services; (4) enhancing social dialogue to help the adoption of new employment reforms. In Oslo on Monday 8 April, the Norwegian prime minister, Jens Stoltenberg stated that new measures must, “now be implemented in order to avoid a major social crisis and political repercussions”. He added that “this is the main political challenge confronting us in Europe today”. Guy Ryder, the ILO director general, said that the EU faces an economic and jobs crisis to which there is no obvious solution on the horizon yet. (JK/transl.fl)