THE ITUC global union federation has urged the IMF not to let the EC-ECB-IMF troika dictate destructive austerity policies.
Sharan Burrow, General Secretary of the ITUC stated on Monday: ‘The annual meetings of the IMF and World Bank confirmed what the ITUC and trade unions around the world have been saying for more than two years.
‘That is: the idea that you can create “growth through austerity” is an illusion that has destroyed million of people’s livelihoods.
‘The IMF should use the important findings it made public this week and support a jobs- and income-led growth strategy, not let a few countries or its partners in the European “troika” dictate a continuation of austerity policies.’
The ITUC noted: ‘Before the 12-14 October meetings opened in Tokyo, the IMF’s chief economist revealed that the Fund had seriously underestimated the impact of budget-cutting austerity measures on national economies, apparently due to using an incorrect “multiplier” in their economic models.
‘However the final communiqué of the IMF’s ministerial committee (IMFC) asserted that only emerging-market economies, not industrialized countries, should “use policy flexibility (to) support growth”, even though ten European economies are expected to be in recession in 2012.
‘It is incomprehensible for the IMFC to tell Europe to pursue structural adjustment and fiscal austerity, even though it is in recession, while only countries that are already enjoying growth are encouraged to support pro-growth policies.
‘It seems evident that this totally incoherent approach came from some industrialised-country governments that have obviously not learned the lessons of the IMF’s research revisions,’ said Burrow.
Burrow also praised the G24 group of emerging and developing countries at the international financial institutions for drawing appropriate conclusions from the World Bank’s World Development Report (WDR) 2013 on the theme of employment.
‘The G24 stated in a communiqué issued at the Tokyo meetings: “We note the finding of the World Bank’s recent World Development Report that a focus on jobs is the most effective means to reduce poverty, empower people, and promote social cohesion”.’
Burrow stated: ‘The World Bank and IMF should re-examine all of their policies through the “jobs lens” as the WDR proposes.
‘We also agree with the G24 that it is unacceptable that governments have missed the deadline for the 2010 quota reform by not ratifying in sufficient number a modest shift of some votes at the IMF to emerging economies.
‘The G24 also made important suggestions, which we share, about the need for the IFIs to do more to combat commodity price volatility, especially in light of the recent food price hike which will drive millions more people in developing countries into extreme poverty.’
Meanwhile in Ireland, serious misgivings have emerged about the scale of savings being achieved under the corporatist Croke Park agreement between government and unions – that protects pay levels to a certain extent in return for industrial peace – in advance of the latest troika visit to assess progress under the bailout.
It is believed that experts from the EU, IMF and ECB are becoming increasingly frustrated with how the Irish coalition is implementing the bailout by cutting public services rather than tackling ‘vested interests’ in the public service and professions.
While the troika is satisfied that overall targets for deficit reduction are being met, there is concern at the way they are being achieved. There is also concern about the budget overruns in health.
In a statement issued on Sunday night, the Enda Kelly government denied that pay bill savings set out in the implementation body report are overstated.
It said pay savings from numbers reductions are based on the average pay of employees.
The statement, issued by the Department of Public Expenditure and Reform, said: ‘Estimates of non-pay savings are calculated by departments and are not related to pay.
‘Savings figures are not over-estimated and are an accurate reflection of the savings made.’
It also denied that a circular was issued to departments instructing them to calculate non-pay savings by using a factor of 40 per cent of pay savings, saying: ‘Departments used their own methodologies.’
Meanwhile, Unite has joined SIPTU in condemning a call from Ireland’s Central Bank to cut wages.
Introducing a Unite survey, Regional Secretary Jimmy Kelly said: ‘The Central Bank recently claimed that Irish labour costs are too high.
‘They want wage cuts to “restore competitiveness”. They did not put forward any evidence or data to justify their claim.
‘This is hardly surprising because the evidence actually says they are wrong.
‘In this document, Unite presents the real facts about Irish labour costs in the private sector.
‘They come from the EU Commission’s data agency, Eurostat.
‘Irish labour costs rank 10th in the EU-15. Nine other countries have higher labour costs than Ireland, leaving us in the lower half of the EU-15 table.
‘However, when compared to the core EU countries we fall well below the average – by 11 per cent.
‘And when compared with other economies similar to our own – small, open economies heavily reliant on exports – we fall 18 per cent below average.
‘This refutes the claim that our wages are “too high”.
‘The Central Bank’s proposal would make a wasteland of the Irish economy.
‘It would collapse the living standards of workers, driving them into further debt, arrears and poverty.
‘It would drive up the Government’s deficit, since lower wages mean lower tax revenue.
‘It would close more businesses and put more workers on the dole, since it would drive down consumer spending and domestic demand.
‘Slashing wages is not part of the solution; it is part of the problem. It is part of the same austerity ideology that has wreaked havoc in the economy and society.
‘Workers and the trade union movement should not only reject the Central Bank’s proposals.
‘We must start mobilising to increase pay. Higher wages puts more people back to work through increased consumer spending.
‘Higher wages reduce the government deficit through higher tax revenue. Mobilising for higher pay and better working conditions is part of a new strategy to grow the economy.
‘The Central Bank is wrong. Irish labour costs are not high. If you don’t believe us – read on. And make up your own mind.’
l Unionists in Nepal and India marched several kilometres to a rally at the Indo-Nepali border last week to stand up for the rights of road transport workers.
They were among thousands of activists around the world participating in the ITF week of action from 7-13 October, involving road transport workers as well as employees across the freight and passenger sectors including railway workers for the first time.
Many unions, including Thai affiliates, also joined the ITUC’s World Day for Decent Work on 7 October.
Actions to mark the week were widespread. In West Africa, a wide range of events took place – from a rally in the Burkina Faso-Ghana-Togo border town of Bittou and a noisy convoy procession.
The ITF Taxi Workers’ Day was marked last Tuesday with local branch members of the Canadian Autoworkers’ Union (CAW) taking to the streets to invite drivers to talk about their working conditions and share their concerns. It was part of their week-long activities nationwide.
Meanwhile regional branch members of the Trade Union of Railwaymen and Transport Construction Workers of Russia (ROSPROFZEL) met to discuss the importance of a qualified labour force in railways and modern vocational training for the industry as well as organising youth action in Krasnoyarsk with a drive to attract more young workers into the trade union movement.
Finnish AKT reported successful recruitment of 600 members to the union.
Further afield, activists in Panama stood in front of Tocumen Airport in Panama City to raise awareness of the importance of joining a union to win better working conditions whilst unions expressed their solidarity with the 20 dismissed DHL workers in Turkey.
In Europe almost a thousand unionists, joined by a convoy of trucks, participated in a demonstration in Brussels on 9 October organised by the European Transport Workers’ Federation (ETF), the ITF’s European arm.
They were protesting about degrading jobs and working conditions across the road transport industry. Unions from countries such as Belgium, France and the Netherlands took part. An ETF delegation also met with members of the European Parliament.