Davos: No return to the protectionism of the 1930s
Participating in the World Economic Forum in Davos, John Monks, General Secretary of the European Trade Union Confederation (ETUC), sounded the alarm regarding protectionism 1930s style, which is in danger of overtaking the economy and society. Mr Monks also appealed to the responsibility of certain financial institutions and certain businesses, calling them to account for the public money from which they have benefited.
‘To quote Binit Patel, the Goldman Sachs economist, “there’s a whiff of protectionism in the air”. The point is that we are finding that in the face of recession, the temptation of “every man for himself” is strong. We have seen many examples of this: every country is drawing up its own plan for kick-starting its own economy, and these might form a short circuit with those of another country. From the Roquefort wars in the United States to the increase in customs duties on car imports in Russia, countless economic sectors and indeed countries are bringing in protectionist measures. The US election campaign was already flagging them for industry, and we can see today that the government has been quick to take protectionist measures for steel. We know where protectionism and nationalism lead: history, alas, has shown us. Is that what we want? The answers must not be dispersed, but integrated. At European level, the answer must be a European answer. Yet where are the European proposals and initiatives? What is the Commission doing to stop its Member States from advancing in a disorderly way? Governments have been very responsive to the first upheavals of the crisis. We must not let up on our efforts, in fact we need to step them up in order to deliver a genuinely European solution. For these are serious times, as everyone knows. This economic and social crisis might grow into a political crisis. All of us here have a responsibility to act together. There are more and more labour protest movements. They began in Greece and have spread to countries such as Iceland, the Baltic States, Bulgaria and France. Workers should not have to pay the price for the greed of some people and the speculation of others. We need to help not just the banks, but also the labour market and the workers.
I call upon certain banks and businesses to recognise their responsibility. Many banks have been bailed out twice now, and been left with their hands untied and not required to be accountable, something that is incredible. They are not passing on the aid that they have been given to their clients or to business. By refusing to loan money, they are crippling the economy. I want enquiries to be conducted into the banks which are in difficulties. Severe penalties must be set in place against the management where it is proven that there has been speculation. Because let us not forget that this crisis is due not just to unbridled financial liberalisation, but also to the avarice and irresponsibility of certain directors of financial institutions. Likewise, struggling businesses which have been given public funding must not channel it essentially into paying out dividends to their shareholders instead of investing.
Without a global political and economic response, without a change in the behaviour of those who have brought us into this crisis, things will only get worse. On one single day alone, 26 January, 70,000 jobs were destroyed around the world. Mass unemployment is looming, in a context where the labour market has become precarious, and this is a new state of affairs. In 2010, unemployment will top 10%. Precarious employment is on the rise; that is why we need to maintain the social protection systems in order to prevent exclusion.
At European level, it is the role of the Czech Presidency and the Commission to seize the initiative of a European response, without dogmatism.’
Was this article interesting and relevant for you? Do you have any comments?
You can post a reply to this article here.