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Kazuhide Hashimoto Gabrielle Fulton, Pierre Habbard and Damon SilversAudienceAudience Jane Barker

Unions from around the world agreed to step up their campaign to expose the dangers that Private Equity debt threatens to the already struggling global economy. “Private Equity debt is the next bubble to burst,” Michael Laslett of SEIU London warned a Private Equity meeting organised by UNI global union in Nyon Switzerland. Companies taken over by PE and loaded with the debt of their own takeovers are already going bust in the US as a result of the credit crisis, what UNI General Secretary Philip Jennings called an “investment strike” and growing recession, delegates heard. “What happened to the banks is going to happen to PE fuelled portfolio companies,” said Michael. “We have to be ahead of the next crisis.” Unions were urged to think much wider than the issues of PE and help re-draw the global financial system with governments that have now nationalised or bailed out banks, mortgage institutions and insurance companies. “We have a conveyor belt of opportunities of people we need to talk to and a political earthquake in the United States with the election of Barack Obama that means we could have a more sympathetic hearing in Washington for our arguments.,” said Philip Jennings. Later this week global unions are off to Washington to lobby for a new, sustainable financial system and will meet the IMF and World Bank in January. “We are not running a free market if banks get bailed out with public money, “ said Damon Silvers of the USA. “We need a labour debate on a mixed economy - which is where the majority of our members and a broad number of working people across the world are comfortable.” There were calls for more “boring” banks and pension funds that need to be weaned off the inflated - and short lived - “super returns” of financial services.

Billions have already been wiped off pension fund holdings by the stock market collapse and more could be at stake if PE investments turn sour. “These are our retirement benefits that are being put at risk of another crisis,” said Michael Laslett.

There was a warning from Damon that no country can assume it will escape the effects of a severe recession - with developing countries too heading for trouble. Millions of migrant workers will lose their jobs in a global recession and remittances to their families will shrink.



Pension funds are to be quizzed by affiliates over their exposure to private equity investment and will be pressed to reveal the high charges that PE groups levy.

New links with NGOs and active community groups will be built.

Global unions will also be taking their message to next February’s “Super Returns” (sic) conference of private equity being held in Berlin.

Philip Jennings is due to address the conference following UNI’s lobbying of the event in Munich at the beginning of this year when unions attacked the greed of PE and warned pension funds of the dangers of putting more money into financing the funds’ activities.

Unions are also expected to organise a global response to the conference to highlight the PE issues that apply across the financial spectrum - including corporate debt levels, tax avoidance and the devastating effect of pursuing double digit profits on companies and jobs.

“We need to press governments and the European Union to legislate,” said Bo Larsen.



The signs of the impact of the financial crisis on the real economy are already evident. Blast furnaces are shutting, ships are not moving without credit finance, deliveries increasingly demand cash payments and people are starving, said Canada’s Dave Coles. “We have to get nervous about what is happening because it could be much more serious than a recession.”

In the UK corporate debt is at a 15 year high, the conference was told by Unite the union’s Jane Barker. “We are just at the beginning of seeing companies going into bankruptcy.”



“We now live in a new world and its shape is up for grabs,” said Paul Hilder of the campaigning group AVAAZ.

“We have to roll things back,” said Jörg Reinbrecht of ver.di Germany. He called for a more public pension system - undoing previous privatisations - and a new economic climate. The aim is more investment in production and infrastructure instead of in financial products.

In the USA in 2006 financial profits represented 40% of all profits - but the financialisation of the global economy has turned out to be dangerously unsustainable.

In Japan unions are looking at ways in which regulations for PE and Hedge Funds can be made more stringent, said Kazuhide Hashimoto of UI Zensen.

Leonor Sierrac from Colombia warned that women will suffer disproportionately in the global recession as jobs and mircro credit dries up.