By Judith Ugwumadu | 10 January 2014
The international bailout programmes in Greece, Cyprus, Ireland and Portugal have not achieved the growth expected and have come at the cost of high unemployment and weakened employment rights, European MPs claimed this week.
MEPs on the Parliament’s employment and social affairs committee yesterday joined with labour market experts to say that the social consequences of ‘troika’ policies could not be ignored.
‘The social side cannot stay out of the troika programmes analysis. Millions of citizens are victims of those programmes,’ said committee member and rapporteur Alejandro Cercas.
‘In order to avoid a fracture between institutions and citizens, there is a need for a democratic dialogue.’
The meeting also heard from Thorsten Schulten of the German Institute for Economic and Social Research. He noted that the aim of the troika’s labour market reforms was to regain competitiveness through direct interventions such as wage cuts and changes to collective agreements between trade unions and employers.
But the result was a weakening in collective agreements, in particular the decline in agreements covering entire employment sectors in favour of company agreements. In Portugal, for example, the number of example, the number of employees covered by sector-wide collective agreements fell from 1.9 million in 2008 to just 328,000 in 2012.
Speakers also highlighted the hike in unemployment, particularly the impact on young people, which had led to emigration more than doubling in all four countries.
Raymond Torres, director of the Institute of Labour Studies at the International Labour Organisation, said there was a need to change the perception that labour regulation harms the economy. He suggested the ILO become involved in the troika’s policy making.
He added that budgetary adjustments needed to support job creation and monetary union had to go hand-in-hand with social policy.
The troika – consisting of the European Commission, the European Central Bank and the International Monetary Fund – provided bailout funds to Greece, Cyprus, Ireland and Portugal in return for economic and financial reforms.
Last month, Ireland became the first troika country to exit its bailout programme.
