New Deal necessary for Europe laid waste by austerity and service cuts

The citizens of Europe have been subjected to a massive fraud. From the outset of the crisis – first manifested in countries like Ireland, in 2008 – the narrative from on high has been consistent, and consistently deceptive.

The first official response was one that is common to all panicked bureaucracies and administrations: blame the people.

Blame the people for wanting decent schools, good hospitals and proper care for their families. Blame the people for wanting decent jobs and a good standard of living.

In this manner, public debt and “excessive” government spending became the great spectre that haunted Europe and threatened the very existence of the union.

But that ghostly spectre was no more than a convenient illusion, a very big and deliberate lie. Before the private financial sector started to topple national economies across Europe, average public debt was falling, not rising.

Nonetheless, the spectre of ballooning government debt served a useful political purpose. Primarily, it obscured the real cause of the crisis and thereby facilitated the mass transfer of public money required to rescue the financial sector from the consequences of its own corrupt actions.

Ireland is the most egregious example of this. Before the crisis we had net public debt of some 12 per cent: it is now 10 times that amount. It cost us €64 billion to save our banks and that bill has been passed to this and future generations.

A striking feature of this crisis has been the almost casual disregard for people’s welfare and for the wider common good that has characterised the official response.

Spectre of public debt
Thus the spectre of huge public debt also provided political cover for the dismemberment of the European social model, perhaps the European project's greatest single achievement and that which persuaded many in the trade union movement to sign up to the process in the first place.

But for those of a less progressive political persuasion, the European social model has always been a costly hindrance and an encumbrance upon the operation of the free market.

Therefore standards had to be driven down to the level of the lowest common denominator and protections for working people dismantled. In Ireland we saw the minimum wage and mechanisms that protected the low-paid targeted.

Elsewhere in Europe, it became easier to fire and replace workers, as though making work more precarious could conjure up new jobs.

The results of this ideological experiment are frightening: the euro zone is now immersed in its longest recession with unemployment above 12 per cent – twice that figure among young people.

Hardly surprising that we now see far-right extremism and social fracture.

We risk losing an entire generation of youth to disaffection and despair as Europe sinks closer to falling below that basic threshold of decency that once was its hallmark.

The Pew Research Centre recently reported that public support for the EU had fallen significantly and that the entire project was “in disrepute” in many member countries.

This corroborates the growing sense of foreboding among European trade unions, who have argued for a dramatic and radical change of course.

This week, the European Trade Union Confederation (ETUC) meets in Dublin to address the theme: High Noon for Social Europe.

Centenary of 1913 Lockout
It is fitting that we do so in the centenary of the 1913 Lockout, when workers battled for their right to a better life.

In those tumultuous events we hear echoes of today’s battle to halt Europe’s spiral and re-establish the pre-eminence of the social dimension.

The ETUC has proposed the adoption of a social compact for Europe as a means of addressing these key deficits.

European trade unions are also calling for a European recovery programme, with the EU investing some 1-2 per cent of GDP in a systematic plan to restore growth and create jobs.

We need nothing less than a New Deal for Europe, in order to regenerate economies stripped bare by austerity and communities laid waste by service cuts. Leaders have a chance to begin this task when they convene for a summit on June 27th-28th. If they fail us again, they will not be forgiven.

Bernadette Segol is general secretary of the European Trade Union Confederation and David Begg is general secretary of the Irish
Congress of Trade Unions