The purpose of this blog is to provide analytical commentary on formal and informal labour organisations and their attempts to resist ever more brutal forms of exploitation in today’s neo-liberal, global capitalism.

Monday, 27 October 2014

Transnational solidarity? The European working class in the Eurozone crisis.

European labour movements are under severe pressure as a result of the global financial and Eurozone crises, which have been used by capital to attack unions and workers’ rights. In our recently published essay in the Socialist Register 2015, Roland Erne and I assess the response of European labour movements to this attack and discuss to what extent relations of transnational solidarity have been established in this process. As Germany plays a central role in the European political economy, particular attention is placed on the role of German trade unions. In this blog post, we draw out some key points of our argument.

German unions under pressure

From the inception of EMU, European unions had not been unaware of the dangers implied in an institutional set-up, in which wages were the only adjustment mechanism to remain competitive. Especially the European Metalworkers’ Federation (EMF) attempted to co-ordinate national collective bargaining at the European level and, thereby, take wages out of competition. In the end, however, the implementation of the co-ordination strategy was unsuccessful. In 2006, the European Trade Union Confederation (ETUC) published for the last time data on whether the various national collective bargaining rounds had been in line with the ETUC guidelines of wage increases along the formula of productivity increase plus inflation. The findings made clear that not only had no country managed to achieve this target except for Finland, but German unions, which had been a driving force behind developing the strategy, were actually the ones that missed it by the largest amount. For the whole period from the adoption of the Euro in 2000 right up to 2012, the average negotiated salary increase in Germany was 5.5 per cent below productivity increase, and even more drastic the effective average salary increase was a further 9.3 per cent below the negotiated average salary. 

Photo by IG Metall

Clearly, these wage developments, while ensuring that Germany could emerge with an export boom out of the crisis, have put downward pressure on wages and working conditions elsewhere in Europe and, thus, become a problem for other European trade unions. Some observers blame German trade unions for this failure. They argue that German unions had co-operated with employers at the expense of workers’ interests elsewhere not only in accepting small wage increases, but also in agreeing on opt out clauses, allowing lower agreements at company level, which are ultimately responsible for the effective average salary being lower than the negotiated average salary. At the same time, German trade unions have also been significantly weakened over the past 20 to 25 years. Increasing transnationalisation of German production has weakened German unions structurally vis-à-vis employers and the deregulation of the temporary agency work in 2003 has fragmented the work force (see Fragmenting Labour). Taking also into account the IG Metall’s defeat in a strike in 2003, it is clear that German unions have lost significant levels of power. Perhaps, they have simply been unable to achieve more? 

The wage development figures for Germany, however, also reveal that in contrast to general assumptions, German workers have not benefitted from the current situation. German productivity increases have to a significant extent resulted from drastic downward pressure on wages and working related conditions. The Agenda 2010 and here especially the so-called Hartz IV reform, implemented in the early 2000s, constituted the largest cut in, and restructuring of, the German welfare system since the end of World War II. In other words, Germany was more successful than other Eurozone countries in cutting back labour costs. Hence, while the mainstream media regularly portray the crisis as a conflict between Germany and peripheral countries, the real conflict here is between capital and labour. Hence, an analytical focus on class struggle is required for the understanding of the Eurozone crisis. And this class conflict is taking place across the EU, as employers abuse the crisis to cut back workers’ post-war gains. The crisis provides capital with the rationale to justify cuts, they would otherwise be unable to implement.

Struggles in Europe’s Southern periphery

It is countries in Europe’s Southern periphery, which have been hit particularly hard by the Eurozone crisis, being subjected to austerity programmes by the Troika. These programmes have not only enforced public sector cuts, privatisation and job losses, they also undermined collective bargaining institutions and are clearly directed against trade unions’ involvement in social and economic decision-making at the national level and shift the balance of power towards capital. Unsurprisingly, resistance against austerity erupted predominantly in Europe’s Southern periphery with 35 out of 36 general strikes having taken place in Southern Europe and France (Weinman und Schmalz 2014: 26, 28-29). 

Photo by Jesus Solana

Interestingly, resistance to austerity brought new types of movements to the fore. In Spain, for example, the 15-M movement was launched on 15 May 2011. 15-M is primarily made up of various other groupings of progressive social movements. The movement coalesced around the slogan of ‘real democracy’, whilst also attempting to assemble various ‘citizen coalitions’ to resist the targeted government actions of austerity. Spanish unions initially hesitated, while there was still a social democratic government in power. Only after the electoral victory of the right-wing Popular Party in November 2011 and anti-union labour market reforms did unions start to organise mass demonstrations and a general strike on 29 March 2012. In turn, social movements often distrust unions, regarded as implicated in the crisis and part of the establishment due to their focus on social pacts and dialogue with employers and government.

Nevertheless, at the local, sectoral level, campaigns based on alliances between unions and social movements have been established. In defence of public education, for example, the so-called Green Tide movement, including unions, parents’ organisations and neighbourhood assemblies, has been formed in Madrid from August 2011 onwards (Béroud 2014 : 52-3). Successful resistance to austerity will depend on successful co-operation between trade unions and social movements of this type.  

Struggle at the European level

When analysing the response by European unions to neo-liberal austerity, it remains important to remember that this is not a struggle between different countries such as Germany on the one hand, and Greece, Portugal, Spain and Ireland on the other. Instead, this is about class struggle between capital and labour. At the European level, unions have been unable to converge around a strong counter austerity strategy. It proved impossible to organise a European-wide strike as a result of uneven political and economic conditions in the various member states, different levels of union power resources and traditions as well as a missing common discursive frame of reference. What has ultimately emerged was first a European-wide day of action on 14 November 2012, which combined general strikes in Greece, Portugal, Italy and Spain with solidarity demonstrations in other countries. Additionally, the ETUC proposed a European investment programme, including the idea that interest bearing bonds, intended to raise the necessary money for investment, should be partly financed and secured through the receipts from a Financial Transaction Tax and a one-off tax on wealthier people.

The most high-profile and successful strategy of concrete transnational solidarity was organised in the service sector. The European Federation of Public Service Unions (EPSU) was crucial in launching the first European Citizens’ Initiative on water as a human right, collecting more than 1.85 million signatures between May 2012 and September 2013 against the privatisation of water in Europe. On the one hand, there is the interest of trade unions in keeping water provision in public hands, as working conditions are generally better in the public sector. On the other, user groups are supportive of universal access to affordable clean water. It is the inclusion of issues beyond the workplace, the right to access to clean water, which has allowed EPSU to link up with other social movements and, thereby, broaden the social basis for resistance and form bonds of solidarity (see also European Citizens’ Initiative on Water).

Finally, we should not overlook developments from below either. While unions often struggle to identify strategies of transnational solidarity, at times workers take the initiative into their own hands as in the case of recent factory occupations by workers in Greece, Italy and France. These workers have not only occupied their factories, but also built first transnational links to support each other as well as with Argentinian workers to learn from their experiences in factory occupations. Unions have to be careful to appreciate this new reality, if they do not want to run the risk of being pushed aside by more active forces in the wider labour movement. 

Andreas Bieler and Roland Erne

The Socialist Register chapter was written during our time at the Centre for Advanced Study in Oslo and is part of our contribution to the Transnational Labour Project

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