Private equity threatens a social Europe

Publicado: 24 Abril 2007
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Philip Jennings



Jeannie Drake



Simon Dubbins



Frank Bsirske

 The rise and rise of private equity threatens to wreck a social Europe - a Europe that provides welfare benefits, decent work and involves trade unions in dialogue.

That was the stark warning to the UNI-Europa Conference in Athens from UNI General Secretary Philip Jennings.

Delegates voted to demand greater transparency from private equity and hedge funds and called on the European Union to provide effective regulation of them.

At its worst private equity group’s borrow cheap money to buy companies, dump the debt on their victims, strip assets and award themselves huge dividends while cutting jobs and working conditions.

Jeannie Drake from the CWU in the UK reported on Macquarie Bank’s very recent purchase of Airwave from 02 and scrapping the staff’s defined pension fund within 50 minutes of the completion of the purchase and without any consultation with unions and pension fund members.

“We are fighting back and we won’t take this lying down,” Jeannie told the conference.

Delegates also backed calls for European action to ensure that Europe-based multinationals respect conventions of the International Labour Organisation wherever they operate around the world and called on the EU to introduce minimum corporate tax rates to avoid tax competition between states that could lead to a race to the bottom for workers within Europe.



Europe has provided peace and well being in the 50 years since the Treaty of Rome was signed, reported the secretary of State at the German Employment Ministry Rudolf Anzinger.

“A social Europe is the correct response to economic globalisation and change in society. Social security is not a luxury, it is essential for social peace.” Germany currently holds the presidency of the EU “We want the opportunities for employment to be created but they need to be good jobs.”



“If private equity prevails it will wreck a social Europe and with private equity there is no way that we will get a fair globalisation,” said Philip. “We demand regulation and workers’ rights.”

He called for transfer of undertaking protection to be extended to financial transfers like buyouts, closing tax breaks and turning off the tap of unlimited funds, which leaves no company in Greece or the world free from the threat of a buyout by private equity or hedge funds.

“The European Union must take a message of decent work and a decent life to the world.”

Unions are facing a hostile attack on collective bargaining, warned Simon Dubbins of Amicus UK. “If we want to defend a social Europe and improve the social agenda we have to find the unity we need, as we did in fighting the Services Directive.”



Within a decade the services sector - covered by UNI and its unions - will account for 80% of employment in Europe and already, globally, service employment for the first time has passed the total for employment in agriculture.

“We reject the Wal-Martisation of the services sector,” said Philip who called for more global agreements to tie service multinationals to labour rights and more union alliances that bring together unions across borders who operate within the same companies.

In Sweden the growth of the service sector has prompted the marriage of SIF and HTF, which goes live on January 1, reported Peter Hellberg and Bengt Olsson.

“The future lies in the services sector and it’s our responsibility to ensure that the future is bright,” said Peter. Bengt warned that much of the employment is in small and medium sized enterprises where often workers are not unionised. “We must cooperate with each other and we will be stronger.”



“Offshoring is pushing us to our limits,” said Piearangelo Raineri, of FISACAT-CISL Italy. Delegates went on to call for early consultation and negotiation over any offshoring plans “with the aim of preventing compulsory redundancies”.



The coordination of wage policies across sectors within Europe is important for unions, said Karl Proyer of GPA Austria. “We need more concrete discussions and specific commitments.”

The successful motion - passed with just three abstentions - called for work to be stepped up to support “cooperation among affiliates and sectors on collective bargaining issues with the objective of improving pay and working conditions and countering social dumping”.

“Collective bargaining at the European level should give further support to the European social model,” said Piearangelo.

With caution in some unions on supra-national bargaining Conference was careful and insisted that “a framework of collective bargaining can only be supported if it respects trade union mandates on collective bargaining and existing industrial relation systems”.