Brussels, 07/05/2007
The ETUC report identifies three main risks to growth:
- Overambitious monetary tightening: If the European Central Bank (ECB) continues to hike interest rates, it will repeat the mistake it already made in 2000, and strangle growth. To avoid this danger, the ETUC is calling for a moratorium on further interest rate hikes over 4%.
- Continuing trend of unsustainably low wage rises. A trend of nominal wages expanding at a rate of around 2% is too limited to sustain a process of robust and self-sustained growth. The ECB should not be alarmed, but should welcome stronger wage increases as an opportunity to base growth on real income rises instead of basing it on high liquidity growth, increasing household debt and asset bubbles.
- Lack of structural reforms improving workers' rights. The danger to future economic developments does not come from collectively bargained wages but from the failure of governments and employers to invest in workers' skills, to improve the work-life balance of workers and to provide involuntary part-time workers with prospects of a full-time job. The ETUC calls for a labour-friendly structural reform agenda that unleashes the potential of the European labour market by providing workers with the right to training, the right to affordable, quality (child) care facilities, and part-timers with the right to a full-time job.
Says ETUC Deputy General Secretary Reiner Hoffmann: “The ECB's mandate is to safeguard price stability and to support growth and employment, not to intervene in the process of collective bargaining. If the ECB does not respect the autonomy of the social partners, it risks losing its credibility in the eyes of workers.”
- ETUC report: A two-handed policy approach to unleash the full potential of the euro area's labour market
