Brussels, 07/05/2007 (Agence Europe) - On Monday 7 May, the European Trade Union Confederation (ETUC), published a reporting in which it warns against policy mistakes that could slow economic growth in the eurozone. Reacting to the European Commission's spring 2007 forecast of continuing, but slower, growth in the euro area, the union report identifies three main risks to growth, says a press release. (1) Over-ambitious monetary tightening: to avoid the error made by the European Central Bank (ECB) in 2000 of raising interest levels and strangling growth, the ETUC calls for a “moratorium on further interest rates hikes over 4%”. (2) Continuing trend of unsustainably low wage rises: a trend of nominal wages expanding at a rate of around 2% is too limited to sustain a period of robust and self-sustained growth, says the ETUC. It believes that the ECB “should not be alarmed, but should welcome stronger wage increases as an opportunity to base growth on real income rises instead of basing it on high liquidity growth, increasing household debt and asset bubbles”. (3) Lack of structural reforms improving workers' rights: the danger to future economic developments comes from the failure of governments and employers to invest in workers' skills, to improve the work-life balance of workers and to provide involuntary part-time workers with prospects of a full-time job, the ETUC says, calling for a “labour-friendly structural reform agenda that unleashes the potential of the European labour market by providing workers with the right to training, the right to affordable, quality (child) care facilities, and part-timers with the right to a full-time job”. Commenting on the report, ETUC Deputy General Secretary Reiner Hoffman said, “The ECB's mandate is to safeguard price stability and to support growth, not to intervene in the process of collective bargaining. If the ECB does not respect the autonomy of the social partners, it risks losing credibility in the eyes of workers”.
The report, entitled “A two-handed policy approach to unleash the full potential of the euro area's labour market - Key points from the ETUC for the macro economic dialogue at technical level, May 2007”, is available, in English only, on http://www.etuc.org . (gb)