CNV

The economic crisis is hitting the world hard. What started as a financial crisis is now affecting the daily lives of many people. Due to the decrease in investments companies on all levels are having to reorganize their organizations, resulting in, amongst others, the letting-go of employees. The focus of the meeting was to exchange information on possible ways to counter the current financial crisis.

A few important questions that were raised by Mr. Raf Chanterie, President of EZA, at the start of the seminar where:

• How is the solidarity between stronger and weaker states;
• How can we prevent or stop the increasing tendency to protect ones national market;
• What can we do to stop the growing unemployment;
• What will the future be like for young people on the labour-market;
• What will the role of the Social Partners be in the future;
• How will we collectively deal with the increasing collective poverty?

At the opening of the Seminar, Ms. Dr. Gabriele Stauner, MEP of Germany, was clear in her approach. The European countries should counter the financial crisis together, when they do not do this, this will lead to problematic situations for some of the countries. In the current situation countries cannot do it by themselves. The interdependency is too great. A second point which she touched upon was the responsibility of managers. These managers should be pointed at their responsibility and think more of the long-term than short-term.

Mr. Ivan van der Cloot from the Belgian Itinera Institute, an independent Think-Tank, stated that during a crisis measures such as progressive taxation and collective bargaining are very important. These structural elements are pivotal since they are automatic stabilizers and prevent the situation from getting worse.

An important reason for the current crisis is the size of financial institutions and the packages they are dealing with. Many influential people warned against the merges between commercial/deposit banks with investment banks. These warnings were not taken into account. While in the 1930s this was prohibited, this was allowed again thereafter.

Adam Smith had already said that the financial system should be divided into different parts otherwise it would result in possible risky situations. The capital market is decreasingly transparent. For instance, the risk of mortgages is no longer on the balance sheet of the banks. Instead these mortgages are sold. This was the case for the risks that were kept in the so-called tax paradises. Although the risk managers knew that this was not good, they did nothing to regulate it appropriately.

Banks bought products which they did not fully understand. Additionally, the figures were based on continuous growth and increase of the real-estate market and prices. The consequence of the ever-growing size of banks is that it becomes increasingly hard for governments to save them. The choice that should be made is that banks should either not become too big, or the EU should create a European institution that monitors banks and is capable of saving them in times of crisis.

Mr. Fritz Schösser, President of the Bavarian region of the DGB (German TUC) stated that the crisis that we are in is unique since we are experiencing three crises at once. We should remain politically humble and cautious with regards to possible solutions. However, we should bear in mind that this crisis is the effect of the decisions of all people, and not just of the financial institutions and their managers. We are all responsible. All people wanted higher interest-rates and more gain. We therefore need a return to ethics and morality again. Not everything should be focussed on profit.

The Maltese Mr. Jean Paul Fabri of the Office of the Prime Minister of Malta, warned against the voices increasingly calling for protectionist measures. “Resilience does not mean protectionist”. We should remain open to the global economy, despite the calls for anti-globalization.

On 14 March Ms. Dr. Gabriele Stauner discussed the Lisbon Strategy and its focus on economy. Three points for the improvement of the position EU with regards competition are very important. These are the economy, education, and knowledge based work. Currently the EU is too dependant on oil from Russia (40%). This should change. In general as well as in view of the climate issue.

Furthermore, the EU should try to decrease its bureaucracy and the amount of documents on various issues. EU member countries have the obligation to report to the EU institutions. This leads to an enormous amount of information.

Countries that adapt themselves well to changes and do not strictly follow the policies are better equipped to the current situation. Flexibility in that sense is very important.

Ms. Stauner: “Flexicurity is not the answer to employment-related problems and I do not support it. The labour-market is either safe or flexible. It cannot be both in my opinion”. Also, there is still a tremendous difference between the wages of men and women. In Germany women earn 17 – 20% less than men in the same job. Europe is doing slightly better with figures between 15 – 17%.

I propose that the EU countries focus on the following issues in the coming years:

• Develop new strategies and goals for the follow-up of the Lisbon Treaty;
• That we retain solidarity to the new EU-member states;
• To, in fact, perceive the European guidelines as guidelines. National changes should be dealt with by the Social partners on national level and not through a court of law;
• Counter the growing Euro-scepticism regarding the influence and the impact of Europe.

Mr. Rudolf Strohmeier, Chef de cabinet of the EU Commissioner Viviane Reding, criticized the Anglo-Sachsen financial model. The model did not work appropriately and the EU countries did not respond well enough due to lack of proper overview. There should come, therefore, a European answer with European guidelines and regulation that will be able to prevent such a crisis in the future or at least minimize the risk. Transparency in this context is pivotal. The crisis should not destroy the internal European market through protectionist measures.

The presentation by Mr. Rudolf Strohmeier was followed by country reports the Czech Republic, Spain, Lithuania, and France. The current economic situation in Spain is very bad. Many have lost their jobs and especially for the illegal immigrants the situation is getting bad. In the USA 4 million people have lost their jobs in one year and Spain fears that the effects of the crisis will hit them hard. One industry that has already been hit hard is the real-estate sector. Many houses are empty and the projects to be built have not started or are not finished.

In Lithuania there are three predominant sectors that are affected by the crisis. The first is the real-estate sector, the second is the manufacturing and export market, and the last is the general decline of consuming.

The general opinion was that people should become more responsible again and renew their sense of ethics and morality. People increasingly want more and more and are now paying the price for that. To say that it is just the banks that caused this crisis is too easy, although their role was very important. Major institutions should become more transparent and sizeable again and deal with actual products. The virtual economy should be in line with the actual economy again to prevent such a crisis from occurring again to this extent.