(AE) SOCIAL: End result of austerity measures in five member states
Brussels, 29/02/2012 (Agence Europe) - Wednesday 29 February was marked by a series of demonstrations, called by the European Trade Union Confederation (ETUC) in all EU member states to protest against austerity and call for jobs and social justice. The previous day, however, the European Economic and Social Committee (EESC) organised an extraordinary meeting in Brussels of its workers' group to debate five reports, taking stock, and also setting out a number of prospects, of the current economic and social consequences of the austerity policies in place in Greece, Spain, Portugal, Ireland and Italy.
Greece. With unemployment running at around 20%, Greece has had 20 months of budgetary austerity programmes which have brought unprecedented measures that have altered the institutional framework to the disadvantage of industrial relations, employees and trade unions. The long-term implications of the measures, which focus on “lay-offs, freezes and cuts in wages, pensions and cuts in overall public spending as well as heavy taxation, privatisation ands structural reforms including radical labour market restructuring”, are a tangible threat to social cohesion, the report says.
Spain and Portugal. Amendment of the Spanish constitution in September 2011 which imposes “the principle of bringing public authorities' spending into line with the public debt limit laid down in the Treaty on the Functioning of the EU” has been combined with deep structural reforms which have weakened the legal framework of labour relations, the social security system and collective bargaining. With unemployment of around 23% (it was 11.8% in July 2008) and 48.7% for 15-24 year-olds, “Spain has now taken a huge step backwards in terms of the distribution of wealth, directly related to the situation of progressive unemployment, the reduction in social spending and the contraction of public services, when, between the 1980s and 2008, Spain had reduced that gap by more than the countries of the OECD”, states the report. The situation is similar in Portugal where all the measures adopted by the government since 2010 effectively seek to contain public expenditure and reduce debt. Portugal was hit again in 2011 by a sizeable recession and the situation in the country smacks of imminent social crisis, unprecedented in recent history, the report warns.
Ireland. The explosion of the housing bubble in 2008 and the banking crisis which followed have left Ireland facing a major crisis. While exports are now rising and unemployment has levelled off at around 14%, “the Irish government has introduced five anti-crisis budgets since 2008 which have had the effect of severely depressing domestic demand”, the report states. Sustainable economic recovery cannot be built solely on exports, which, against a background of financial market uncertainty as to the EU's capacity to absorb its own difficulties, are particularly volatile.
Italy.Italy has not carried out such drastic reforms as the previous four member states. The social and employment consequences result principally from the crisis and unemployment remains below the European average (8.9% in December 2011). However, the measures planned by the Monti government, such as “the introduction of a prima casa tax (on primary residences), an increase in the higher rate of VAT, as well as increases in fuel excise duties and many tariffs” could have an adverse effect on the least well-off households, the EESC report states.