“The EU states began implementing tax reforms that benefitted big companies. They privatized social security, and completely deregulated the market. There was strong reliance on the stock market and it was developed to an excess. On the other hand, social benefits for workers and other sectors of the working people were slashed. Since the early 1990s, the EU has been imposing the liberalization policy in the industries of telecommunications and railways, as well as the postal services. The formerly public services became new fields for profit for private capital,” De Ceukelaire said.

These policies resulted in massive lay-offs, erosion of the salaries of government employees and their working conditions. The immediate effect on the greater public was the deterioration of public services. In the meantime, because of the Bolkestein directive, the services that were provided by the private sector were further liberalized. Policies on wages, social security and the labor market, however, were still decided at national levels.

Proponents of the directive said that it aims to create a free market for the services sector by removing the legal and administrative barriers that supposedly hinder businesses from offering their services in another country. The directive aimed to encourage cross-border competition, and it covers a vast range of businesses such as hotels and restaurants, car rentals, construction, advertising services and estate agencies. It also covers advice provided by professionals such as architects, and certain public services, such as social care and environmental services. Excluded were a number of areas, including broadcasting, postal services, audiovisual services, temporary employment agencies, social services, public transport and gambling and healthcare.

Opponents insist that the directive will push down wages, lower standards of social and environmental protection

In the meantime, the European Union has also put together its Lisbon 2000-2010 strategy. This was supposed to make Europe “the most competitive and dynamic knowledge economy in the world.”

The rat race to the bottom

De Ceukelaire explained that the Lisbon Agenda set standards for an overall employment rate (70 percent by 2010), and set the retirement age higher. Member states were given good and bad points to exert moral pressure but there was no enforcement of these policies. It was a so-called open coordination.The goal is, by 2010, for the EU to surpass the US in competitiveness and productivity and to confront the future threat of positions lost to rising powers such as China, Russia and India.

To enable European companies to compete with their US counterparts, the exploitation of the European workers had to become more intense and comprehensive. Capitalists added new concepts to their arsenal such as “flexicurity” (supposed job security in exchange for working extremely flexible hours); “employability” (the availability of workers for the labor market at any time); and “activation” (forced integration in the labor market) of the unemployed, elderly and even handicapped people.

“This kind of competition with the US is nothing but a rat race to the bottom as regards social rights and welfare,” said De Ceukelaire.
EU member states further reduced social security system benefits such as pensions, health and welfare. They also abolished collective labor agreements and replaced them with contracts for “alternative employment.” Concretely this meant work contracts valid only for a specified period or for part-time arrangements such as occasional employment, “zero hour” contracts, distance employment, and piecework.

Companies were also emboldened by the new economic strategies to deregulate dismissals on the one hand, and to strengthen the systems for so-called “tripartite employment relations.” This meant that workers were perpetually “for hire” and businesses no longer have the responsibility to uphold labor laws pertaining to job security and benefits.

Rulings by national and Community courts or the Court of Justice of the European Communities have also begun on the warpath against workers rights, characterizing strikes as illegal and abusive. The courts argue that strikes are in violation of “Community law” and “the Four Freedoms.”

The Four Freedoms refers to the frontier-free area the EU establishes within which (1) people, (2) goods, (3) services and (4) money can all move around freely.

Protests in Portugal and Greece

The international economic crisis has hit European countries hard, but among those most severely affected are Portugal and Greece.
De Ceukelaire said that Greece suffered most from the crisis in the eurozone. He said that the Greek government has launched a number of austerity reforms in order to assure itself of bail-outs from the EU and the International Monetary Fund (IMF).

In the last two years, more than € 45 billion (US$64,430 million)have already been saved by cuts in government programs or collected in extra taxes. Despite this, however, public debt has risen from 135 percent to 156 percent of the Gross National Product (GNP).
Within one year, unemployment increased by 40 percent. Among the youth, 42 percent are unemployed. In 2010, the Greek economy shrank by 55 percent. There was a 21 percent increase in the value-added tax on many basic necessities. The government agreed to privatize assets for € 50 billion (US$71,590 billion): airports, railways, power plants, even its tourist beaches.

“So far, the shock therapy had no effect and yet prices are skyrocketing while the average income of the Greeks dropped by nine percent in just one year,” he said.

In Portugal, the wages of public employees have been frozen until 2012. The minimum wage, in the meantime was lowered to €485 (US$494) The government raised VAT on many basic products. As a result the price of bread increased by 10 percent and electricity by six percent. The taxes paid by banks, however, were slashed by halved.

According to De Ceukelaire, the protests against the global economic crisis and the crisis in Europe are strongest and most organized in Portugal and Greece. This is no coincidence, he said, because the two are among the countries hit exceptionally hard. “Both countries are also home to a strong labor movement and communist parties,” he said.

The Portuguese Communist Party (PCP), with no less than 400,000 members, is at the heart of protests. In November 24, 2010, more than three million people took to the streets in protest of the proposed austerity measures. The government proposed cutbacks on public spending as well as wage cuts for public workers, and it was no surprise that and 75 percent of the protesters were workers.

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