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No going back to old economic ways
Published: 6 November 2008
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There can be no going back to the ways of unfettered capitalism that have caused the worst financial and economic crisis in decades. That was the clear message from a UNI-Europa Finance conference in Vienna determined to defend jobs already under siege from the economic fall out of a sub-prime crisis, a credit crunch and stock market melt down. The conference forms part of the project "A transnational framework for Industrial Relations: At the heart of an etchical and social European finance industry" co-financed by the European Commission. UNI Finance has already offered the ‘eyes and ears’ of three million finance union members around the world to help new regulators enforce a tougher regime to control the risk takers. A global week of action to highlight the union response to the crisis is also planned for early next year by UNI Finance, which chose “Eyes on the risk takers” as the conference theme. In Vienna the 150 delegates backed a detailed 13-point package that would increase transparency, extend statutory regulation to all corners of the financial world - including hedge funds, sovereign wealth funds and pension funds - and build greater international cooperation in supervision. Other key priorities include an end to tax privileges on private equity, a crack down on tax havens, the creation of independent rating agencies and an end to the pay greed of top executives. “Executive pay should reflect the long term success of the company, not the short term recklessness of these top executives,” said UNI’s Barbara Wettstein. One delegate called for executive pay to be included in collective bargaining agreements. Another delegate urged governments to keep their rescue stakes in financial institutions to influence better behaviour. Delegates called for a union seat at the negotiations to build new regulatory systems and to re-build the global financial architecture established at Bretton Woods more than 50 years ago. Several delegates warned that neo-liberalism is down but not dead. “We have to bury this neo-liberal economic approach and ensure that the one we build from the wreckage is different,” said UNI General Secretary Philip Jennings in a keynote speech to the conference. UNI Finance has already sent its ‘eyes and ears’ plan to French and current EU president Nicolas Sarkozy and to key EU and Euro-zone leaders that include the President of the European Central Bank Jean-Claude Trichet. Next week global unions will be pressing the G20 group of nations to work to rescue the economy and modernise the world’s financial system. “It’s all about a proper system of checks and balances with all stakeholders involved,” said UNI Finance’s Oliver Roethig. GPA Austria President Wolfgang Katzian called for a change in economic policies with new priorities. He warned of the dangers of people losing faith in financial institutions and their ability to deal with this crisis - a situation that historically led to wars. “Financial alchemy made a very sparkling and costly firework - now is the time to return to sustainable banking,” said Judith Ay from the saving bank employers’ group. “Innovation does not replace the core standards of sound banking.” “This is a storm for which the finance industry is responsible,” said UNI Finance president Allan Bang. “We will fight for political and ethical changes in the industry to avoid crises of this kind in the future.” “We have to keep our eyes on the risk takers,” said Oliver Roethig. “The system is the problem and it has to go. We have seen the results of the scorched earth policy to maximize profits that governments and regulators allowed for years.” He also called for a Charter of Responsible Lending to ensure that the interests of customers are put first and not the targeted selling of company financial products that they may not fit their needs or be what they can afford. Some delegates predicted a renaissance in retail banking following the ultimately destructive domination of investment banking. Summing up the debate Rob MacGregor, of Unite the union UK, called for an inquiry into the crisis - to include the “*systemic failure of regulation and corporate governance”. “We are already feeling the impact of this crisis - some colleagues have already lost their jobs,” said Roberto Treu of FISAC-CGIL Italy. Takeovers - often shotgun affairs to stave off a collapse - threaten more job losses in the industry and a loss in diversity. In Iceland lawmakers have scrapped collective agreements in the three banks recently nationalised. “We are at the end of a model and in the middle of a crisis,” said Manuel Aporta of Comfia-CC.OO Spain. ”We have to stop the lay-offs.” “We must put the workers to the forefront,” said Stavros Koukos of OTOE Greece. “Our major priority should be to guarantee employment for our members.” There was a call to defend the diversity provided by regional savings banks - that make up 50% of the banking markets of Spain and Germany. Mutual financial institutions may have to be reinvented in the UK, said Rob MacGregor, following the conversion of most building societies to banks in the Thatcher and Major years. “We have to evolve new ideas of social responsibility,” said Hose Antonio Gracia of FeS-UGT Spain. Members need to be involved in the UNI Finance campaign said Edgardo Iozia of UILCA Italy. Andrew Cassidy from FSU New Zealand urged unions to reach out to customers. “We need to be the voice for customers as well as for staff.” “There is no quick fix to this financial crisis,” said Unite’s Anne Abbott “we have to do what we do best, organising and representing our members”. The conference report in EN, DE, FR and CZ is enclosed in related files. Other events held in the context of the project in related articles. |
