Public and Social Economy in the Economic Crisis:

1. ITUC/PERC – OGB European Conference: Europe – 20 years of Transformation. What next?Vienna, 15-17 September 2010 Public and Social Economy in the Economic Crisis: Impact on the Labour Market and Sustainable Development Presentation by D-r Ivan Kokalov EPSU European Federation of Public Service Unions – EPSU Fédération Syndicale Européenne des Services Publics – FSESP Europäischer Gewerkschaftsverband Öffentlicher Dienst – EGÖD

2. 250 affiliated trade unions with 8 million paying members • 68,5 % of our members are women • 4 sectors: Health & Social Services; Local & Regional Government; National & European Administrations; Utilities (gas, electricity, water, waste) • EPSU = recognized European Social Partner Organisation

3. Economic Crisis - Multiple causes • Neo-liberal politics with prevailing concept of laissez-faire financial capitalism, leading to a general shift in income distribution at the expense of workers and low-income groups = economic model of inequality • Deregulation of public services and public goods, privatization (including of originally public banks) acerbate crisis • Private bankers greed, motivated by short-term interest in selling high risk-financial products, motivated by bonus payments • At the same time: climate crisis, energy crisis (oil will become scarce, 1,7 trillion Euros investment necessary into European energy infrastructure), global food crisis

4. Economic Crisis – Impact (1) • Initially impact on industry, e.g automobile industry and private services, e.g. banking • Governments poured in billions as saving measures • Now public services are used to balance the books, with many years of austerity to be expected • Low and middle income earners, nurses, teachers, firefighters, refuse collectors, child care workers, prison officers, police, tax inspectors, customs officers, administrators, etc. • Women in public services – likely increase of gender pay gap as a further result of outsourcing, undoing recent progress

5. Economic Crisis – Impact (2) • Pay freezes or cuts in Greece, Hungary, Ireland, Latvia, Estonia, Lithuania, Netherlands, Romania, Serbia, UK, Ukraine, Bulgaria Table: Wage cuts and pay determination mechanisms in the public sector (2009-2010)

6. Table: Wage cuts and pay determination mechanisms in the public sector (2009-2010)Sources: Eurofound 2007 ; Traxler , Eurofound 2010, Planet Labour 2010, EPSU

7. Economic Crisis – Impact (2) • Non-respect of collective agreements – opening up of existing agreements, Slovenia, Croatia • Pension reform: Greece, Hungary, Netherlands, Spain, Bulgaria • No replacement of public service workers: France only replacing 1 in 3 that go, Greece 1 in 5, Spain 1 in 10 • IMF packages with Bosnia-Herzegovina, Hungary, Iceland, Latvia, Romania, Serbia, Ukraine • EU procedures on deficits against several countries and Commission intervention in pay determination in Hungary, Latvia, Romania and Greece

8. Return to Business as usual • Commissioner Olli Rehn letter of 29 / 3 / 2010: ‘Sustaining high government deficits over a prolonged period is detrimental to growth, welfare and employment… • In contrast: Commissioner Joaquin Almunia in letter of 10 / 12 / 2009: cutting public wages or public employment is not considered as a priority by the Commission as they both contribute to stabilize the economy in the face of aggregate demand shocks.

9. How to counter the market bias? Public Services in the EU (1) • Macro-economic policy, e.g. the Quality Public Finance Initiative – small government, low taxation levels • Liberalisation of ‘network’ industries, attempts to open up the waste and water sectors • ‘Divide and rule’ between Services of General Interest (SGI), Services of General Economic Interest (SGEI), Social Services of General Interest (SSGI), non-economic Services of General Interest… • Public services and cooperation as the ‘exception’ to the rule of competition and profit-seeking, • Regulation in business interest, e.g. Services Directive, Better Regulation Agenda, EU trade policy.

10. How to counter the market bias? Public Services in the EU (2) • 2007 Commission Communication on SGI was linked to the Single Market Review • Public procurement as the way to provide ‘essential public services and • ‘Dragging feet’ on the inclusion of social criteria in public procurement contracts • Bias against ‘in-house’ provision of public services and inter-municipal cooperation • Consumerism vs. solidarity? EU patient mobility rather than improve national health systems • November 2009 Commission publishes Green Paper on ‘Developing Public Private Partnerships’,only setting out arguments in favour of PPPs, it does not offer a balanced assessment

11. EPSU Strategy: Quality Public Services – Quality of Life (1) • Use Lisbon Treaty provisions, Article 14, Public Services Protocol, Fundamental Rights Charter and Local Government Autonomy Clause to develop positive framework for public services • Terms of Public Services Protocol, i.e. high level of quality, safety and affordability, equal treatment and the promotion of universal access and of user rights as benchmarking tool • Primacy of public service obligations over market compliance • Extend definition of ‘in-house’ to social economy providers if they reinvest benefits into maintenance and improving operating structures and abide by public service principles

12. EPSU Strategy: Quality Public Services – Quality of Life (2) • Collate evidence on privatization models gone wrong, such as with PPPs, in cooperation with www.psiru.org • Encourage public-public cooperation • Press for sufficient public spending on public services, progress taxation and tax efficiency, financial transaction tax, Eurobonds • Accent on solutions through social dialogue, e.g. Joint Statement of Social Partners in Local and Regional Government on the economic crises of February 2010 http://www.epsu.org/a/6212 • Build alliances, e.g. ‘Spring Alliance’ open letter to the European Council: Put people and planet first. • http://www.epsu.org/IMG/pdf/03-22-10_final_letter_to_European_Council.pdf

13. EPSU Strategy: Quality Public Services – Quality of Life (3) Financing, Organisation, Delivery of services Equality, Cohesion, Social inclusion Transparency, participation of users and social partners quality public services = quality public sector ! Wages, Skills, working conditions

14. A New economic policy for Europe EPSU promotes an Economic Policy for Europe which includes: 1. A change in the role of the European Central Bank 2. A revised Stability and Growth Pact (SGP) 3. Strengthened European Economic governance The ECB, SGP and the strengthen European Economic Governance are relatedto the Euro-zone. They will have broader implications as their measures affectother countries. An example is the SGPs 3% budget deficit norm. It is also usedin non-Euro-zone countries and especially those that strive towards EUmembership.

15. ITUC/PERC – OGB European Conference: Europe – 20 years of Transformation. What next?Vienna, 15-17 September 2010 Public services are more vital than ever. They are not just an important stabilizing mechanism but provide essential support to the millions of citizens who are suffering the worse consequences of theCrisis.

16. ITUC/PERC – OGB European Conference: Europe – 20 years of Transformation. What next?Vienna, 15-17 September 2010 Public and Social Economy in the Economic Crisis: Impact on the Labour Market and Sustainable Development by D-r Ivan Kokalov, EPSU ikokalov@citub.net Thank you for your attention! European Federation of Public Service Unions – EPSU Fédération Syndicale Européenne des Services Publics – FSESP Europäischer Gewerkschaftsverband Öffentlicher Dienst – EGÖD