Report Economy before equality?

Europe stuck between austerity and social progress

As EU countries face difficult social and economic times in the wake of the pandemic, the evidence is clear: inequality is on the rise. From France to Germany and the UK, discontent is bubbling up in the form of strikes. The question of rights and a long-term vision of society are becoming increasingly urgent.

Published on 3 May 2023 at 09:00

“Regression in social rights”, “precarisation of jobs”, “no recognition for hard work”: such are the slogans being seen on the streets of France to denounce the recent pension reform. And yet there is nothing unique about the French situation.

"Similar reforms have already been launched in other European countries. The protest movement seems unique to France, but this reaction is comparable to similar phenomena linked to the 'cost of living crisis' in the UK and Germany for example, countries which are less prone to strikes", notes Nicola Countouris, research director at the European Trade Union Institute (ETUI), whose annual report has just been published (Benchmarking Working Europe 2023).

Economic governance takes priority

"In fact, there is nothing specifically national about these structural reforms, since they are requested by the European Commission within the framework of economic governance," says Emmanuelle Mazuyer, director of research at France's Centre for Scientific Research (CNRS) and a specialist in European social law. Europe’s integration project remains fundamentally centred on markets, particularly since the advent of the euro. "The priority always goes to the economy, to the reduction of public deficits, it's the DNA of the European Union," adds the researcher. "All other transitions – including ecological, digital and economic – must be adapted to this framework," says Nicola Countouris.

The debate is taking place at a time when the countries of the "EU are going through hardships following Covid-19. The evidence is clear: wealth is distributed in an increasingly inequitable manner. According to the ETUI report, "today economic insecurity affects not only those in low-paid and temporary jobs, labelled 'the precariat' by Guy Standing (2011), but also a wider professional class including teachers, nurses, management executives, carers and lawyers". In March 2023, the French national institute for statistics (INSEE) reported that rising corporate profits in Europe had contributed to inflation in 2022.

Did Europe learn nothing after the financial crisis of 2008? "The EU is truly at a crossroads. It can redouble the effort and commitment it showed in the face of the Covid-19 crisis, this time by ensuring that its actions are not geared just to emergencies but rather towards fundamental reforms. Or it can fall back on its pre-pandemic austerity model and ignore the wider social issue. We believe that this second approach would be doomed to failure and that without a social transition, all other transitions are likely to fail", says Nicola Countouris.

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Moments of crisis, instead of generating social advances, often result in backsliding. "Initially, we see countries falling back onto their traditional national models. Then, as social policy is expensive, priority is given to reducing public deficits and sovereign debt", argues Emmanuelle Mazuyer. Thus, after deregulating job contracts and making labour relations more flexible, national governments are now targeting social benefits: shrinking unemployment rights, raising the retirement age and privatising systems through the use of pension funds. "Measures are only taken when they also serve economic objectives, such as the recent increase in wages to compensate for inflation and the cost of living," notes Emmanuelle Mazuyer.

In an article published in 2021, researcher Amandine Crespy looked at what European citizens want: "growth, unemployment and social inequalities remain at the top …

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