ITCILO (ACTRAV Turin) in cooperation with ACFTU (China) “Wage-led, Job-rich recovery from crisis” Beijing May 2013 Cinzia Del Rio – UIL (Unione Italiana del Lavoro) Member ILO Governing Body

EUROPEAN UNION 27 countries + Croatia to become full member on 1st July 2013 Euro area – 17 countries: Italy, France, Belgium, Spain, Portugal, Austria, Germany, Cyprus, Finland, Ireland, Greece, Luxembourg, Malta, Netherlands, Slovenia, Slovak Republic, Estonia Out of the euro area – 10 countries + Croatia: UK, Romania, Bulgaria, Latvia, Lithuania, Poland, Denmark, Check Republic, Hungary, Sweden The countries of the euro area share a common monetary policy based on agreed parameters to control inflation and ratio debt/GDP (Maastricht criteria – Stability Pact) The economic and monetary policy of the euro area is “controlled” by the European Central Bank and the European Commission. Important to understand impact of Fiscal Compact and role of ECB in the crisis.

SOME ECONOMIC AND EMPLOYMENT DATA Unemployment in EU (age 15-64): in ,9% in ,4% March ’1310,9% Worrying increase, men hit more than women, employment rate lower for women Disadvantaged groups – low-skilled, youth, migrants, long-term unemployed Youth unemployment (age 15-24)Feb. ’13EU area23,5% Italy38,4 Alarming problem in Spain, Italy, Portugal GDP – stagnation forecasts 2013 slight recovery, but euro area very slow (less than 1%, compensated by Germany, Italy still in recession), China more than 7%, India 5%, USA around 3% Decrease in domestic demand – export-led economy /countries

Social consequences: - Rise in inequalities social / employment Rise in poverty Social unrest, growing anti-European movements Changes in the labour market ► Period 2008-’10stimulus policies, automatic stabilizers social protection floor ► from 2011 onward austerity measures to consolidate fiscal budget ► increase in labour market divergence young people, women, long-term unemployment, migrant, low-skilled ► growing atypical forms of contracts unvoluntary part-time, flexible contracts (limited social security coverage), bogus self-employed, no collective bargaining coverage; ► labour market and pension reforms (Spain, Portugal, Italy, Greece, France, Ireland, Romania, Bulgaria, etc.) ► young people most hit in temporary jobs, NEETs (not in education, not in training, not looking for a job) EU Youth Guarantee: how to finance it? ILO role, European Regional Conference, Oslo conclusions Apprenticeship reforms (EU Plan, G20 Platform)

CONSEQUENCES Changes in collective bargaining structures A) IMF – ECB – OECD policy: ► austerity measures for fiscal compact: structural reforms (labour market, welfare, social security systems-pensions) ► Cut wages (minimum wage and wage agreements) ► Decentralize wage-setting arrangements B) Austerity-induced political interventions: ► Led to fundamental changes in national wage-setting and collective bargaining institutions; ► Troika interventions: Portugal, Ireland, Greece ► ECB interventions: Italy, Spain ► IMF interventions: Romania, Latvia, Hungary ► EU Economic governance system: all EU member states a) European Semester process, binding country-specific policy Recommendations from EU Commission b) Fiscal Pact

C) Implications for the actual outcome of negotiations in terms of wage developments ► more restrictive criteria for extension of collective agreements (Greece, Portugal, Latvia, Romania ► facilitating derogation from national sectoral agreements or legislative provisions (Greece, Italy, Portugal, Spain, Hungary) ► suspension of favourability clauses (Greece, Spain) ► promoting bargaining capacities of company-level actors to negotiate firm-level agreements (Greece, Portugal, Spain, Hungary, Romania) ► reducing period of validity of an agreement (Greece, Spain) freezing of wages (Public sector in particular, several countries)

D) wage moderation/ restrictive minimum wages ► wages vs productivity (real – nominal wages, enterprise-level productivity) ► wages vs employment (wage dumping, decrease in domestic demand) ► wages vs inequalities (collective bargaining at enterprise level, competitive wages, OECD data, increase of poverty risk) Minimum wage cuts (in countries subject to supranational intervention): Greece, Ireland Minimum wage increase mechanism suspension (Spain, Portugal, Latvia, Romania) Cancellation of bonuses and extra-payments (for example 13th-month salary), Portugal, Romania, Hungary, Latvia, Lithuania, Estonia Germany: slight increase in nominal wages in some sectors, opposition of the Government to a statutory minimum wage to balance wages in other sectors. E) right to strike- attempts to limit it

THE EUROPEAN TRADE UNION RE-ACTION The Social Compact for EuropeJune 2012 Meetings with IMF-WB-EU Institutions The Social dimension of the European Union April 2013 Pillars of the Trade Union position 1)social democracy: respect of collective bargaining instruments, strong role of social partners, promotion of social dialogue, better working conditions; 2) economic governance: need to negotiate with social partners reforms at national level, how to promote sustainable growth, high quality jobs, public services, public investments; EU Recovery Plan; 3) economic and social justice: fair wages, redistribution policies, taxation (also corporate), social protection (minimum wages/ social minimum income) 4) compliance with fundamental social rights: social-work standards, competitiveness vs. social and wage dumping

What is needed at EU level: radical change in macro- economic policies; ► Investment plan for Growth and Jobs to be financed through ECB, EIB, FTT and other EU funds. ► Job-rich recovery: quality jobs, skills, retrain of adult workers ► Competitiveness policy: investments, innovation and Technology, infrastructure, skills, (not only wages), harmonization of fiscal policy (impact on unit labour cost) ► Wages: need to rise internal demand, surplus countries should allow more wage- based consumption on both domestic and imported goods in order to stop the spiral of a protracted period of economic stagnation. Cina ITCILO ACFTU Jobs and Employment in Europe maggio ‘13/CDR