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Prof Klaus Busch Turkish unions on the top table UNI-Europa Executive holds its first meeting in Istanbul Executive discussion: Heinrich Bleicher Nagelsmann, Johanna Skuk and Rolf Büttner

The trade union movement was urged to become more pro-active in dealing with a European Union where the proportion of national wealth going to workers in pay and benefits is falling, where inequalities are growing and where judges are writing the laws of cross-border labour disputes. The UNI-Europa Executive meeting held in Istanbul - in solidarity with Turkish unions and the difficulties they face - heard of the increasing difficulties EU unions face in the war against wage and social dumping. There were many calls for a co-coordinated response including greater cooperation in pay bargaining across borders. “It’s not enough to react - we urgently need an agenda and stop reacting piecemeal to what the European Commission is doing,” said UNI-Europa President Frank Bsirske. “We have to look at what our project is - if we do, we can win majority support for our agenda.” With a fixed exchange rate in the euro zone, wages, social spending and tax levels have become key competitive weapons between member states. The result has been social expenditure flat or falling, pay levels that have not kept pace with inflation or productivity and a bidding down of corporate tax levels that puts even greater pressure on social benefits and a bigger tax burden on workers. A response at a European level was urged, with suggestions including a social contract to create a corridor (like a currency “snake”) that would oblige governments to keep social spending in general line with each other according to their wealth. There were calls to halt the competition to bid down corporate tax rates between EU states. In the UK for example corporate tax stands at 28% with the same tax rate in Ireland at 12.5% and pressure on the UK government to cut its rates or lose companies, reported Peter Skyte from Unite the union.

“There is a shift towards capital - away from workers - but it is not industrial capital for investment, it is financial capital,” said Michel Muller, of FILPAC-CGT France.

“We are trying to recover the purchasing power of our salaries,” said Daniela Rondinelli of FISASCAT Italy.



“Only by European action can we stop a downward spiral in pay and social welfare and social dumping,” said Prof Klaus Busch from the University of Osnabrück, who briefed the Executive on proposed solutions.

Real unit costs have fallen by 10% in Germany and 15% in Ireland, he told the Executive. “It’s not unemployment that has weakened us, it is the form of European integration. The European Union is an economic union. To survive in the future it has to become a social union.”



UNI-Europa’s Nina Johansson reported on a series of ECF court rulings that could curtail the rights of unions to fight wage dumping as companies move in from other countries or employ subsidiaries and workers from other, lower paid EU countries.

The ECJ has invented a test of “proportionality” to restrict unions in their actions against dumping that is not in European legislation.

It leaves unions in high wage countries that have no legal minimum wage or legally binding collective agreements to defend, vulnerable to big damages suits from employers if they take action that a court subsequently decides is “disproportionate”.

“What we are seeing is European legislation on the right to take industrial action being made by the European Court of Justice,” said UNI-Europa President Frank Bsirske.

The rights to fundamental freedoms like the right to defend pay rates and the right to strike are being out-balanced in judgements by commercial freedoms to set up operations across EU borders.

“These cases are extremely serious - for us and the Europe that we want to see built,” said Bernadette Ségol, UNI-Europa Secretary.