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In the new Employment and Social Developments 2012 Report, Commissioner Andor paints a dark picture of the social situation in Europe. Its conclusions question the recent assertion of President Barroso that the euro crisis is over. UNI Europa Regional Secretary, Oliver Roethig says: “Andor must follow-up on these results and take a strong stance within the Commission to reverse the downward spiral leading to the impoverishment of European societies. We need to stop austerity now!”



The Report highlights a deteriorating state of affairs with extremely high unemployment levels. It rings the alarm with regard to increasing periods of long-term unemployment, and building up risks of social exclusion for particularly vulnerable social groups. The economic slowdown translated into recession in Europe for 2012. National automatic stabilisers under austerity did not yield the desired results. Indeed welfare states have not been able to stop the overall drop in disposable incomes for workers. Welfare states have come under severe strains following the imposition of fiscal and economic consolidation measures. The Report identifies a division among European countries: some are trapped in a vicious circle of declining output, rapidly increasing unemployment and grinding down of disposable incomes, whereas other countries appear resilient to the crisis. Further divergence is observed between North and South euro-zone members with an overall widening of the unemployment rate gap. Smaller in scale but still growing divergence is also observed outside the euro-zone, between North and East.



In line with the conclusions from the World Economic Forum’s Global Risks Report 2013, growing income inequality is identified alongside the related social polarisation as the major risk for the global and European economies. Andor speaks out for minimum wages at suitable levels so as to avoid in-work poverty traps. The Report concludes that no one-size-fits-all solution exists and remains very pessimistic on the possibilities to achieve the employment and poverty reduction targets of the Europe 2020 Strategy. In backdrop, the latest statistics point to the highest peak in unemployment levels in Europe for the last two decades: 26 million unemployed in the EU with Spain and Greece having the highest rates 26.6% and 26% respectively. Greece and Spain observe the highest youth unemployment rates (57.6% and 56.5%) and a staggering over 66% of female youth unemployment for Greece.



The Report recommends to Member States to implement structural labour market reforms which ensure decent minimum wages so as to avoid low-wage traps and in-work poverty. It remains silent however over the policy options of national policy-makers and social partners.



While recognising the depth of the social crisis, Andor offers no alternative to the continuation of the neo-liberal climate of imposed and unsocial austerity measures to be pursued in the framework of the European Semester 2013.



Oliver Roethig, resolutely reiterated that “overcoming the current crisis can only be achieved through an alternative economic strategy based on social dialogue, sustainable growth and employment aimed at the advancement of living and working conditions.”



You can access the Employment and Social Developments 2012 Report and related documents here.