IG Metall: Europe needs solidarity, not austerity

Early in December, IG Metall, Germany’s and the world’s largest trade union, hosted a conference in Berlin where trade unionists, academics, and politicians from 60 countries gathered to lay out alternatives to European austerity measures that have created such misery throughout the continent.

The main message of the conference was that solidarity rather than austerity should be the guiding principle for overcoming the effects of the continent’s current economic crisis and for building a new Europe.

“We want a Europe based on solidarity, whose citizens stand by one another during crises in particular,” reads a declaration by the conference. “We call for a Marshall Plan for the countries affected by the crisis. We want a world economic order that is rooted in solidarity, provides everyone with fair opportunities, and gives them equal life opportunities.”

Speaking at the conference, James Galbraith, an economics professor at the University of Texas at Austin, said that the austerity measures imposed on countries like Greece, Spain, and Portugal are exacerbating the crisis and fueling desperation which could lead to a downward spiral of violence and chaos.

Galbraith praised a document published last October by IG Metall’s executive board as a viable alternative to austerity and the chaos that may result from it.

The document entitled “Change of Course for European Solidarity” proposes a new vision of Europe based on solidarity, joint liability, an enhanced social pact that improves wages and security and ends social divisions, more regulation of financial markets, and more worker participation in the economic and political decisions that affect their lives.

The document lays out an alternative economic course for a more unified, democratic, and prosperous Europe. It calls for a continent-wide industrial and economic policy that converts the European economy from one that is at the mercy of financial markets to one that is socially and ecologically sustainable. Among other things, such an economy would distribute wealth fairly, make industry more energy efficient, transition to renewable energy, and embrace demographic change. Workers and their trade unions would have prominent voices in shaping policies that bring about this change.

“Only the prospect of an economically strong, environmentally and socially sustainable and democratic Europe can help overcome the deep identity crisis among citizens in the process of integration,” reads the document.

According to “Change the Course,” the public sector needs to play an enhanced role in the new economy by making substantial investments in education, training, research and development, and infrastructure.

Economic policy that sets social and environmental targets must be made at the level of the European Union, which will soon include 28 nations, rather than national governments. The working class should directly participate in how these targets are set. At the company level, co-determination, the active participation by workers in setting company goals and priorities, must be strengthened and expanded.

A more sustainable economy would also limit precarious work, low-paid temporary employment that provides little if any social benefits. “A new order in the European labor market is called for,” reads “Change the Course. “This must not only protect and promote secure jobs covered by wage agreements, but also help to discourage (jobs) of the precarious nature.”

Another important piece of IG Metall’s new vision is joint liability for the debts that poorer European countries incurred as a result to the economic crisis.

The document’s joint liability proposal calls for richer European countries to guarantee poorer countries’ public debt that exceeds 60 percent of Gross National Product. Such a guarantee would reduce the cost of borrowing and relieve some of the financial pressure on these countries.

Since risky financial speculation brought on the financial crisis that led to Europe’s economic crisis, financial markets should be more tightly regulated. Commercial and investment banks should be separated and governments should insure only the deposits of commercial banks. Short-selling should be banned, speculative activity regulated, and high-frequency trades restricted. There should also be a financial transaction tax among eurozone members to discourage speculative trading.

In order to integrate Europe, make its economy more sustainable, help poorer countries exit their economic malaise, and control financial speculation, Europe needs to expand democracy and increase worker participation at all levels. “IG Metall calls on Europe to turn to its workers again,” reads “Change of Course. “Too many people think that politics at the European Union level serves only corporations and the lobbyists. As a result, many workers see a united Europe as a threat to their well being.”

To combat this idea, worker participation in European Union policy development should be expanded, and the EU should include a social progress clause in its charter. Such a clause would include language that safeguards wages and social benefits in the richer countries, establishes a continent-wide set of minimum social standards, ends discrimination against women and migrants, and ends the expansion of low-pay sectors and wage disparity. “The same pay and same rights for the same work in the same place must be firmly established,” reads the document.

The Berlin conference in December gave IG Metall a chance to present the vision in “Change the Course” to a wider audience and to hear other alternatives to austerity policies. A declaration issued by the conference sums up the problems caused by the old order and envisions a new way to structure economies based on solidarity and social justice.

“The financial crisis that has plagued the global economy for the last four years shows us that financial market-driven capitalism is a mistake,” reads the declaration. . . . “Those in work must not become the plaything at the mercy of the economy. The economy is not an end in itself. It has to serve the needs of human beings and should be based on values such as solidarity, justice, dignity and respect.”


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